Microsoft announced an unsolicited offer for Yahoo last Friday. I first longed Yahoo because its market price was $2 below MSFT's offer price. I soon closed the position for a small profit and longed MSFT instead, which was down almost 10%. The risk/reward ratio for YHOO just seems much higher than MSFT. This move would almost surely help MSFT in the long run, and if the offer was turned down by Yahoo or the acquisition was rejected by the regulatory bodies, MSFT would almost surely see a short term bounce.

The consolidation tide continues in the software industry, with Oracle leading the way so far. MSFT would top Oracle in total amount if this deal were to go through. Who is still around standing alone in the Valley? Tibco, VMware (still majority owned by EMC), Intuit (MSFT tried to acquire it earlier but failed), Adobe, Salesforce.com, and NetSuite.

I wouldn't be surprised if in a few years there are only Microsoft, Oracle, SAP, IBM, HP, and, who else, Google, left as legitimate players in the enterprise software market.

With the recent introductions of Unbreakable Linux, and Oracle VM, Oracle has effectively completed its software stack. Anybody who says Oracle is just a database vendor is just, well, outdated.

SAP has been growing a lot more slowly than Oracle in applications license growth, and its NetWeaver platform, although improving steadily, is probably never short listed unless a customer is already running SAP applications. But it's still twice as large as Oracle in apps market share even after Oracle acquired PSFT and SEBL, and we all know that install base is mostly gonna be there for the foreseeable future.

HP's acquisition of Mercury Interactive seems to have made a lot of sense. Systinet seems to be the market leader in SOA governance. Will HP screw up Mercury? It might. Will Sun screw up MySQL?

The top 3 BI vendors have been gobbled up recently. Who's next? BPM and BRM vendors?