Most tech takeovers since 2007 spurred by Data Torrent

NEW YORK: Cisco Systems, the world's largest maker of networking equipment, estimates that by 2015 the data equivalent of all movies ever made will cross Internet networks every five minutes. How to manage all that data is what will be driving technology mergers and acquisitions in 2012.

In a bid to transform that torrent into profits, a cash rich industry is poised to surpass 2011's almost $200 billion volume of announced mergers and acquisitions as companies such as Cisco and International Business Machines search for deals that will boost their capacity to provide new storage, analytics and security services to enterprise customers.

Big data, mobile and cloud technologies will drive "bold investments and fateful decisions," market researcher IDC said in a recent report. The volume of digital information may balloon from 2.7 zettabytes this year -- the equivalent of filling 2.7 billion of Apple's priciest desktop iMacs to capacity -- to 8 zettabytes by 2015, according to IDC.

"The speed at which technology innovation moves is such that you can't miss a step," said Jon Woodruff, the San Francisco-based co-head of technology investment banking at Goldman Sachs Group, the industry's top adviser on deals last year. "Every tool has to be used for speed and nimbleness sake, and M&A is one of those significant tools."

Abundant cash and investor pressure to jumpstart sales growth will also propel deal-making. Cash levels have expanded 21% in the past year to $513 billion, based on holdings of the 35 members that comprise the Morgan Stanley Technology Index.

Large companies will be leading the charge. Hewlett-Packard, Google and Microsoft led a 36 % gain in technology deals last year, outpacing an advance of about 4% for all M&A worldwide, according to data compiled by Bloomberg.