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NEW YORK. (

TheStreet

) -- Software, cloud services and networking ... Let the tech M&A activity heat up.

"This year is critical because the market is so high and so many of the stock prices are at very lofty levels," Joel Achramowicz, senior vice president of research at investment bank Blaylock Robert Van, told

TheStreet

. "It's a good time to be using equity for transactions."

Storage ranked high on the M&A list last year, marked by

Hewlett-Packard's

(HPQ) - Get HP Inc. (HPQ) Report

tussle with

Dell

(DELL) - Get Dell Technologies Inc Class C Report

for

3Par

,

TheStreet Recommends

EMC's

(EMC)

$2.2 billion acquisition of

Isilon

, and Dell's

Compellent deal

, although software looks set to be a big trend in 2011.

"I expect software to continue to be a big driver of consolidation across the industry," said Charles King, principal analyst at research firm

Pund-IT

. "Despite its success, HP has some notable holes in its software/middleware portfolio (pointing to a singular blind spot of former CEO Mark Hurd, and one which I expect new CEO Leo Apotheker was hired to correct), so I expect the company to be an active player. "

"We believe M&A activity will shift from storage to data center management software and networking in 2011," said Jayson Noland, an analyst at Robert W.Baird, in a recent note. Possible software targets include network management firm

Solar Winds

(SWI) - Get SolarWinds Corp. Report

, email marketing specialist

Constant Contact

(CTCT)

and customer relationship management (CRM) outfit

Right Now

(RNOW)

, according to the analyst firm.

Robert W.Baird believes that Solar Winds would be a good fit for IBM, HP, or

CA Technologies

(CA) - Get CA, Inc. Report

, while

Intel

(INTC) - Get Intel Corporation (INTC) Report

could be a possible suitor for Constant Contract, along with

Paychex

(PAYX) - Get Paychex, Inc. Report

.

Right Now would sit nicely with

Adobe

(ADBE) - Get Adobe Inc. Report

or

Oracle

(ORCL) - Get Oracle Corporation Report

, it said.

In the hardware market Robert W.Baird sees security firm

Fortinet

(FTNT) - Get Fortinet, Inc. (FTNT) Report

as a likely target, continuing the M&A buzz around the company. Fortinet, which competes with

Cisco

(CSCO) - Get Cisco Systems, Inc. Report

,

Check Point Software Technologies

(CHKP) - Get Check Point Software Technologies Ltd. Report

and

McAfee

(MFE)

, pushes its FortiGate appliance as a sort of Swiss Army knife for network security: it combines firewall, antivirus, VPN and intrusion prevention systems.

With cyber threats increasing, Fortinet has already been

touted

as a potential target for HP, IBM, Dell and Oracle. Boosted by strong results, however, the company's stock has risen more than 148% in the last 12 months, although its $2.87 billion market cap is still well within the reach of tech's biggest hitters.

Other corners of the tech sector are also heating up. Managed hosting/cloud services have seen some action already this year, with

Verizon

(VZ) - Get Verizon Communications Inc. Report

recently

spending $1.4 billion

on

Terremark

(TMRK)

and

Time Warner Cable

(TWC)

grabbing

NaviSite

(NAVI) - Get Navient Corp Report

for $230 million.

Other candidates in this space include

Internap

(INAP) - Get Internap Corporation Report

and

Rackspace

(RAX)

, according to Brenon Daly, senior M&A analyst at The 451 Group. "You could certainly make a defensible case for Rackspace and Internap as acquisition targets, because of their positioning," he told

TheStreet

. "Rackspace has a solid cloud business and Internap also has a content delivery network (CDN)."

Rackspace shares popped last year on chatter about a possible Dell merger, and Daly thinks that

Web hosting firm

Level 3 Communications

(LVLT)

would benefit from buying a CDN player such as Internap or even

Limelight Networks

(LLNW) - Get Limelight Networks, Inc. Report

.

The

best known of the CDNs

, which provide services for delivering data over the Web, is

Akamai

(AKAM) - Get Akamai Technologies, Inc. Report

, although its $8.8 billion market cap would make it a pricey acquisition. Internap and Limelight Networks would be cheaper alternatives, according to Daly.

Blaylock Robert Van's Achramowicz, however, has a slightly different take. "The two companies that come to mind

for acquisition are Akamai and

Riverbed

(RVBD)

," he told

TheStreet

. "Akamai has been doing content data management for a long time."

The analyst acknowledges that Akamai would be a pricey deal, but says that the firm would still be a good purchase for the likes of IBM or HP.

Riverbed, which makes products for improving traffic across Wide Area Networks (WANs), is one of

TheStreet's

top networking stocks for 2011

and its technology is seen as key for companies consolidating their data centers and building cloud infrastructure.

"There has been a lot of talk about Riverbed -- they are a great company," said Achramowicz. "I think that somebody like a Dell or a HP would find them interesting, even someone like an

EMC

(EMC)

because of their data storage focus."

--Written by James Rogers in New York.

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