Ever since two spectacular deals this summer — VMware Inc.'s initial public offering and Citrix System Inc.'s $500 million acquisition of XenSource Inc. — set off speculation over future dealmaking among makers of virtualization software, there's been a short list of buyers, including Hewlett-Packard Co., IBM Corp. and Cisco Systems Inc. said to be hunting for good buys in the sector.

This report from the 451 Group, which has closely followed the virtualization phenomenon, suggests that acquirers could extend well beyond basic makers of computer and networking gear to include chipmakers and telecom gear makers, such as LM Ericsson, Qualcomm Inc. and Texas Instruments Inc. The theory here is that virtualilzation technology further commoditizes computer equipment by squeezing more performance out of each box. Companies in the business of making plain old gear will have to look elsewhere for more robust sources of growth.

Expect to hear a lot more about some of the new virtualization companies and their potential buyers at next week's VMWorld conference in San Francisco. —Andrea Orr 

See report from The 451 Group
See Aug. 28 story from TheDeal.com
See related post from Tech Confidential

Tags: VMware, virtualization, ipo, m&a, vc, venture+capital