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Gartner Predicts What Microsoft Will Buy

Microsoft Corp. has a well-earned reputation for acquiring and investing in firms and technologies by the boatload. Analyst firm Gartner this week issued a report detailing what it expects Microsoft will buy in the next few years.

"Microsoft has the means ($38 billion in cash), the opportunity (the closure of the antitrust case and a soft economy) and the motivation (accelerated growth as an enterprise vendor) to make major acquisitions in professional services, workload management, security management and storage management, among other areas," according to Gartner.

Gartner's new report reiterates the prediction of another recent Gartner report that Microsoft will buy a major IT professional service vendor with a globally recognized brand by the end of 2005. The prediction comes despite a flat statement by Microsoft CEO Steve Ballmer this month at CeBIT that Microsoft won't be buying service companies.

Gartner's predictions are that Microsoft will spend:

  • $15 billion to buy up to five IT professional service vendors.
  • $500 million-$1 billion to own or acquire workload management tools.
  • $1 billion to acquire companies, technologies or both to support its storage management efforts.
  • $3 billion, primarily in investments, to advance broadband technologies and adoption.
  • $1 billion to further its media goals without trying to become a "media company" a.k.a. AOL-Time Warner.

    Gartner also predicts Microsoft will make "major investments" in managed security service companies for a My Security Services offering, and will begin paying dividends. Gartner assigns probabilities ranging from 0.6 to 0.8 for all of the predictions in the report.

    An interesting chart in the Gartner report compares Microsoft's cash on hand to that of Intel, Cisco, Sun, Dell, IBM and Oracle. Microsoft's $38 billion dwarfs all the other companies' cash-on-hand amounts, which range from about $4 billion to $10 billion.

    The report is available on Gartner's homepage: www.gartner.com.

  • About the Author

    Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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