Cloud, SaaS are bright spots in tech's weak M&A market

Overall merger and acquisition activity fell 35% in 2012 compared to the year before in the tech industry, but companies are still investing in SaaS technologies

The total value of technology mergers and acquisitions (M&A) fell 35% in 2012 compared to 2011 on concerns of sluggish macroeconomic conditions, but cloud computing represented a bright spot, with software as a service (SaaS) companies specifically being a hot target for activity, according accounting firm Ernst & Young.

Total tech M&A deals amounted to $114 billion in calendar year 2012, compared to $175 billion in 2011. There were about the same number of deals last year compared to 2011, but they were worth less money. The average size of deals fell from $218 million in 2011 to $188 last year. The biggest bust in 2011 came from the lack of mega-deals: In 2011 there were 36 deals worth more than $1 billion; last year, there were only 28.

[MORE M&A: Top Tech M&A Deals of 2012 ]

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Network World staff writer Brandon Butler covers cloud computing and social collaboration. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW.

Read more about cloud computing in Network World's Cloud Computing section.