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) -- From


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$7.7 billion deal






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ongoing bidding war

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, tech M&A is back with a vengeance. So who's going to be next?

Networking, security and storage are three of the hottest areas today, according to experts, with








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all in the spotlight.

After a tough 2009, companies like


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, HP, Dell and Intel now see a window of M&A opportunity, particularly given renewed uncertainty about the broader economy.

"I think that companies get the sense that we're not fully recovered," Brenon Daly, an analyst at The451Group told


. "Before we get deals knocked off by a double-dip recession or a mellowing in the economy, companies want to get deals pushed through."

With growing cash hoards, it's hardly surprising that some of tech's biggest names are driving M&A, according to Bill Soward, CEO of software specialist

Adaptive Planning.

"There's no question that this cash balance thing is becoming quite a challenge for these big companies," he told


, explaining that shareholders want to see cash put to good use. "I think that there are

also some competitive pressures in play -- people are trying to redefine their business."

Read on for more on potential M&A targets Riverbed, ArcSight and CommVault:


Riverbed, which sells products for improving traffic over wide area networks (WANs) has been enjoying strong sales growth, and is seen as one of the most attractive companies in the networking space.

"I have always said that Riverbed belongs inside HP," Daly of The451Group told


. "

Riverbed is an outstandingly run company

and is by far the most successful WAN traffic optimization vendor."

There are plenty of other reasons why Riverbed and HP would be a good fit, according to the analyst.

Daly explained that Riverbed and HP already have a long-standing OEM relationship, not to mention the fact that the networking firm is a

big Cisco (CSCO) - Get Cisco Systems Inc. Report competitor

. Cisco, of course, was once close to HP, but stepped on its partner's toes by entering the server market, prompting all-out war between the two companies.

The latest

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cited Riverbed, along with

Aruba Networks


, as among the top market share gainers in networking. Technology research firm


estimates the worldwide market for WAN optimization services will increase to $2.6 billion by 2015 from $1.4 billion in 2009, based on a forecast for a CAGR

compound annual growth rate of 11.1%

Riverbed, which recently posted record second-quarter revenue of $126.2 million, is planning a

major push into the cloud computing market

. The company also recently

clinched a major partnership with telecom giant Verizon (VZ) - Get Verizon Communications Inc. Report

, providing yet more evidence of its momentum.

With cloud services in the spotlight, Riverbed's stock is up almost 70% this year, and the company, which declined comment for this story, currently has a market cap of $2.8 billion. For a company like HP, which has a cash position of $14.8 billion, a Riverbed deal could be money well spent.


One of


top security stocks


M&A chatter about ArcSight is rising to a crescendo.

"This has been a name that has had speculation of an acquisition for quite a while," Erik Suppiger, networking and security analyst at Signal Hill Capital told


. "It does make a strategic fit with a lot of the big systems integrators and big technology companies."

The Wall Street Journal

reported last week that ArcSight has put itself on the auction block. Citing people familiar with the matter, the


said that potential buyers, including


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, could pay up to $1.5 billion for the company.





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are also possible purchasers, the report said.

"In a time of consolidation, I could see how it makes sense -- ArcSight is a strong technology leader in the security information management space," said Suppiger. An ArcSight acquisition could open the door to both new accounts and additional services revenue, he added.

IBM, however, already has its own security information management technology, so the analyst thinks that HP would be a more likely purchaser.

HP and McAfee are both said to have been interested in ArcSight before its 2008 IPO, so a deal would not be completely out of the blue. As a public company,

ArcSight has come through with consistently impressive results

, adding to its allure.

The Cupertino, Calif.-based firm has refused to comment on the acquisition rumors, although Intel's McAfee deal appears to have reignited the security M&A market.

"Intel paid an almost four times multiple for McAfee," said Suppiger. "It would not be hard for me to justify a seven times multiple for ArcSight, given the growth that they have had, and the strategic nature of the acquisition."


Could CommVault be another Dell storage target?



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-- any of those guys could be interested in this company," Brian Marshall, an analyst at Gleacher & Company, told


. "I do think they are a good target -- they are definitely relevant."

With a market cap of a little more than $1 billion, CommVault is around half the size of 3Par, and touts its Simpana software as a way for firms to backup, archive and search growing volumes of corporate data. CommVault also champions something called data de-duplication, which ensures that identical pieces of information are stored only once, a key technology for reducing storage expenditures.

"Clearly, de-dupe, backup and disaster recovery technology are important these days, and CommVault has a good software solution," Marshall explained. "CommVault is

also a good takeover size -- I think that an acquirer could pay a nice premium for it and it would be accretive pretty much from day one."

Despite posting disappointing first-quarter results, CommVault still offers an "impressive" gross margin of almost 90%, according to Marshall.

Crucially, Dell is already a reseller of CommVault's software.

With PC margins taking a hammering, Dell certainly has a big incentive to look elsewhere for profit, as evidenced by the company's $3.9 billion acquisition of services specialist

Perot Systems

. Storage, however, has hardly been a key area for the computer maker, although the 3Par bidding war suggests that this may change.

Set against this backdrop, investors have certainly been paying attention to CommVault. The company's shares have risen almost 19% in the last five days, but dipped on Monday following news that HP had upped the ante in the 3Par bidding war.

"We don't comment on industry rumor and speculation around acquisition," explained David West, vice president of marketing and business development at CommVault, in an email to


. "That said, we are focused on building and developing strong relationships with our OEM and strategic partners - Dell is a great partner and we've been successful in integrating with their technologies."

--Written by James Rogers in New York.

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