The Software Industry in Transition: A period of Consolidation

The software industry is on the cusp of a substantial change. Ten years ago, the Internet almost overnight rendered the mainframe and client/server models of computing dead. This heralded an explosion of a myriad of new companies offering internet-based applications and features, whilst the larger software vendors raced to achieve domination of the new model.

Today, after that burst of activity, the software industry is entering a critical period of consolidation as the industry finally matures. Smaller companies that offered application features are now being acquired by the larger players and eventually there will be just three or four major application vendors. This transition could happen in a very short time.

What factors have precipitated this consolidation? 

What effect will this M&A activity have on the software industry overall? 

What benefits will this ultimately deliver to organizations to better manage their businesses and remain competitive?