Citigroup analyst Brent Thill went through a similar exercise last week and came up with some other M&A possibilities in software -- Informatica (INFA), Tibco (TIBX) and BladeLogic (BLOG). Other potential targets, he says, include Check Point Software Technologies (CHKP), THQ (THQI) and Nuance (NUAN).

The stocks with the highest risk, Pritchard says, are Citrix Systems (ticker: CTXS), an application-delivery software outfit, and Blade-Logic (BLOG), a maker of data-center software. And, owing to the financial-services industry's turmoil, Pritchard sees business-software makers Computer Associates (CA) and BMC Software (BMC) as somewhat vulnerable.

Outperform - Price 25.30 on Sept. 4
by Cowen & Co.
We believe shares can outperform the market by 20% to 25% over the next 12 months. BladeLogic [a maker of automation software and server-management systems] is levered to some of the most powerful growth drivers in technology...Data-center economics are changing, with operational costs now far outpacing capital costs...Competitor Opsware was recently acquired by HP for a valuation 22% ahead of BLOG's current share price. We count...nine potential acquirers for BLOG [and] view acquisition as upside scenario. The stock's not cheap, but numbers have an upward bias. Market cap: $675.4 million