Keep An Eye On Amazon's M&A Binge

• The share price of Amazon.com, Inc. AMZN has appreciated 36.46 percent over the past year, touching a high of $693.97 on December 29.
• Pacific Crest’s Brent Bracelin has maintained an Overweight rating on the company, with a price target of $800.
• The upcoming acquisition of Nice S.p.A. NICE would make the fifth software design firm acquired by Amazon over the past year.

Analyst Brent Bracelin believes that “small software shops that address unique niches with highly differentiated technology to become increasingly valuable as the cloud battles shift from the "price war" era in 2014 into the "feature war" era of 2016 and beyond.”

Bracelin believes that the acquisition of Nice-Systems would help AWS accelerate cloud computing adoption within the HPC industry, which is expected grow to $31 billion by 2019.

With Nice S.p.A. marking the fifth software and sixth technology acquisition in the past year, Bracelin believes that this suggests “an increasing appetite to acquire unique and differentiated software design shops that could help enterprise accelerate the adoption of the AWS cloud platform and further differentiate AWS services from Google Compute and Microsoft Azure.”

Although most of the innovation on the three large cloud platforms has been driven by internal software development, Bracelin argued that an inflection point in the adoption by large enterprises, seen in 2015, could lead to the next “big battle” in cloud computing.