SAP will make small purchases to flesh out NetWeaver, according to the analysts. These may include vendors of user interface tooling, master data management software, and business process management products, they said, citing SAP's recent buy of Yasu Technologies, which makes a business rules engine, as evidence. "Additional acquisitions could come from existing partners like AmberPoint SOA Management, F5, Magic Software Enterprises, OpenText, Savvion, and Worksoft," they added.

Among the big four players, Microsoft will be "the least active" in terms of acquisitions, according to Forrester. "Expect the Redmond giant to make selective acquisitions that do not conflict too much with its ecosystem strategy," they wrote. Possible targets include "middleware solution providers like VisionWare in the customer data integration space, Riversand Technologies in the personal information manager space, and Web 2.0 specialists that enhance its Information Workplace platform."

Software executives offered mixed reactions. Tom Hogan, senior vice president of HP's software division, said his firm will likely continue to acquire companies, but is focused more on organic growth. Last year HP spent about 70 percent of its roughly $3.5 billion research and development budget on software, according to Hogan.

"That's a lot of internal R&D that should ... generate commercially viable software over the next couple of years," he said. "If you want to really hit the home run for shareholders, you build it yourself. When we can't build it because we don't have the DNA or the time, then we will turn to strategic M&A."

Executives at smaller vendors offered other takes. Informatica, a data integration vendor, is competing with the likes of IBM but enjoying strong growth, reporting this week that its 2007 revenues rose 21 percent to $391 million. CEO Sohaib Abbasi said mergers and acquisitions in the software industry should be examined beyond the size of a given deal.

The pace of consolidation is much more aggressive in established categories like business applications, he noted. "At the other extreme is emerging categories such as software as a service, where there is no consolidation to speak of."

Informatica is doing well thanks to the relative newness of its space, he said: "We are in the very early days of the data integration market. Half of our deals are uncontested."

Patrick Durbin, CEO of the portfolio-management-software company Planview, said in a recent interview that his privately held firm, which has 450 customers, has "critical mass" and can survive as an independent.

Durbin's firm partners with various companies, including Microsoft. He couldn't say for sure what would happen if it or another firm came knocking: "The moment I tell you I'll never sell is the moment someone's going to back up a truck with a boatload of money."