The number of enterprise IT vendors could shrink—yet again—during the next year as the big players will continue to spend billions on scooping up competitors and rounding out their software portfolios, according to a new survey from The 451 Group.

More than 85 percent of corporate development professionals at actively acquiring companies said in the survey that they "expect to maintain or increase current-year levels of merger and acquisition (M&A) activity in the coming 12 months," with half of the companies expecting to increase M&A spending. Less than 10 percent of the respondents said they expect their acquisition volume to decline. The survey polled corporate development and strategy professionals from companies that collectively have spent more than $150 billion to acquire nearly 500 target companies during the past five years.

Recently, SAP's purchase of Business Objects and Oracle's overtures for BEA Systems have ratcheted up the level of excitement (and unrest) in the space. In fact, The 451 Group reports that strategic acquirers almost tripled their year-on-year technology M&A spending in the past six weeks alone. "Part of the spectacular growth in the year to date has come from a spate of very large transactions," writes analyst Tim Miller, author of the report. "Six, including Oracle's recently spurned $6.7 billion offer for BEA Systems, were greater than $5 billion in value. Three of those six were announced in the first two weeks of October. In the same period in 2006, there was one transaction greater than $5 billion."

IT vendors also point to the recent financial woes in the private-equity sector as to why they feel there will be less competition to make strategic acquisitions, Miller writes. The survey found that 44 percent of respondents expect to see less competition from private-equity acquirers in the coming year, while nearly 60 percent expect increased competition from other strategic acquirers. "And in what suggests something like sweet revenge," Miller continues, "about 60 percent of respondents expect to see increased opportunities to pluck assets from private-equity-owned companies this coming year—perhaps from some of the private-equity buyers that outbid them for deals in the recent heyday of buyout firms."

Miller notes several market forces that are allowing big IT vendors to pull this off. First, he points out, is what one survey respondent noted: "There is simply too much technology (supply) chasing too few buyers (demand) with need for the technology. Niche technologies offer opportunities for tuck-in deals for suppliers of truly whole product solutions with established distribution and market access. Add this with the availability of capital, and you have a recipe for significant M&A activity."