In the first part of this article I ended with the question, how long before the Asians move from being manufacturers of code to becoming the designers and creators of software impacting the global IT industry?

We are already seeing more and more creativity being sourced in Asia. Software development in India continues to move up the value chain as local outsourcers offer multi-service contracts between infrastructure, development of application and package implementation services.. At the same time, despite increased wages and the rising rupee, Indian companies post strong cash flows allowing them to go out and acquire abroad. Just recently, Mumbai based i-flex Solutions invested in Castek Software from Canada, Tata Interactive Systems (TIS) took over two European firms of Tertia Edusoft Group, MASCON Global Ltd. acquired U.S.-based Anthem Technologies Inc for $19 million, Kanbay International acquired Adjoined Consulting for $165 million, and Wipro Technologies acquired Austrian New Logic for $56 million, U.S.-based mPower for $28 million and cMango Inc for $20 million. While Indian companies look abroad, foreign companies are making acquisitions in India. Oracle acquired 41% of i-flex Solutions for $ 550 million while U.S.-based Corpus purchased the Bangalore-based Itellix Software Solutions for $2.5million and Israel-based Ness Technologies took over Hyderabad-based Innova Solutions for $25million.

We have also monitored increased activity in China as well with transactions such as Yahoos purchase of a 35% stake in alibaba.com for $1 billion. Chinese companies were also busy finding strategic investments both at home and abroad, as Shanghai-based Shanda Interactive Entertainment did with its purchase of a 19.5% stake in Sina.com. Within the mobile entertainment segment Focus Media Holding announced it is acquiring Beijing-based Dotad Media Holdings, and Tencent Holdings announced it would acquire a 100% stake in Korea-based Joymax.

The previously mentioned transactions are not individual highlights. As an example of the impact Asian companies are now having on the global software M&A market, we can look at the mobile sector where they accounted for 8 of the 38 deals we tracked last quarter. In 50% of the transactions, foreign companies acquired Asian companies with the goal of providing not only channel to their buyers, but also content and technology for the local and international markets. Like Monstermob, a U.K.-based mobile games and ringtones firm, acquiring M Dream, currently the largest maker of mobile games in China, for up to $35 million. In the other four deals, the Asian companies were the ones who were making the acquisitions.

All in all, the software M&A game is becoming more global by the day and Asian companies are now impacting the global software and IT industry. As an industry player, you will need to consider Asian companies in your M&A strategy either as targets or as potential buyers.

A version of this article originally appeared in Soft•letter and Software Success.