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To: Bill Harmond who wrote (11078)4/10/2002 11:10:02 AM
From: stockman_scott  Respond to of 57684
 
Report: Microsoft Buying Spree 'Inevitable'

By boston.internet.com Staff

In the last decade, Microsoft (NASDAQ:MSFT) has snapped up more than 60 companies to enhance its offerings. But entangled in a federal antitrust case, the Redmond, Wash., software giant has not closed a major deal since December 2000.

That is about to change, according to analysts at Gartner (NYSE:IT). Microsoft has amassed a cash reserve of $38 billion, making large acquisitions "almost inevitable," the Stamford, Conn., research firm concludes.

In a new report, Gartner's Tom Bittman said delaying buys was "cautious and sensible" in the unlikely occurrence that the U.S. Justice Department succeeded in splitting the company.

"Now that it appears Microsoft will come through the case somewhat unscathed, it will find a way to invest this cash through key acquisitions," Bittman said.

Over the next few years, Microsoft will likely spend $15 billion to acquire up to five IT professional services vendors, Gartner predicts. In addition, it might shell out up to $1 billion for workload management tools and another $1 billion to further its media goals.

But Gartner analysts said Microsoft is not looking to become a traditional media company. Rather, it wants to become a technology provider to more traditional companies in the sector.

"We expect more investments in broadband that will drive demand and ensure Microsoft technologies are considered by companies, rather than Microsoft acquiring Yahoo! for example," Gartner's David Smith said.

Other areas Microsoft may seek acquisitions in are storage management and security management. Gartner's report was released at the company's "Windows: Nothing But .NET" conference in Los Angeles.

internetnews.com