TechWeek: Pop Goes the Equity Bubble

"Debt is a fixed cost, and that's a lesson that should have been learned some time ago," Gebaide said in an interview. "But it seems to have been forgotten."

That's a real worry in the technology sector, where about 35% of the $295.8 billion in M&A transactions were financed with private equity, according to Capital IQ, a division of Standard & Poor's. A year earlier, the total value of M&A transactions in technology was just $146.6 billion.

That reminds me of a conversation I had in December of 2005 with Bill Teuber, then-CFO of storage giant EMC(EMC Quote). "What keeps you up at night?" I asked him.

His answer: "There's approximately $125 billion [in private equity] sitting on the sidelines. Historically they've stayed out of tech because they couldn't leverage the balance sheet enough." But that's likely to change, he added.

Exactly right. Private-equity money going into tech M&A is generally much lower than it was in 2006; over the years, the average probably ranges from 15% to 29%, says Gebaide.

Teuber worried that private capital would drive up the cost of acquisitions and slow down the pace of bargaining because there are more players at the table -- and that is what's happening. And that's not great news for shareholders of companies such as EMC or Oracle(ORCL Quote), companies that have pegged much of their growth to aggressive M&A strategies.