A large amount of M&A activity took place in the cloud market last week, and experts told the Wall Street Journal this could be just the start of the action.
If the pace continues, 2016 will beat last year’s record of 1,526 software deals, according to the Wall Street Journal.
Dealogic said 739 M&A deals targeting U.S. software firms have been announced so far this year, with a total value of about $52 billion.
Analysts say the burst of activity follows the market downfall of early 2016, which was hard on the tech sector and even more difficult for cloud and internet companies. Between January 1 and mid-February, the Nasdaq Composite lost 15% of its value, while the BVP Cloud Index—a compilation of cloud software companies—fell by 36%, according to the Wall Street Journal.
The markets have been coming back, but slowly, which has provided opportunities for companies looking to capitalize on deals. The cloud market still looks like a strong bet for the future. An April report from International Data Corporation predicted public cloud growth of approximately 14% to $24.4 billion in 2016, while a May report from Synergy Research found that the overall cloud market grew by an astonishing 50% in the first quarter of 2016.
But true "deals" are few and far between, experts say. Salesforce spent $2.8 billion for Demandware; Thoma Bravo paid $3 billion for Qlik; and Vista Equity Partners paid $1.8 billion for Marketo.