Possible retail consolidation following on from the financial meltdown in Iceland is all the sector can talk about this week. But another knock-on effect of the current economic climate is that it could spell a whole new wave of consolidation in the technology sector.

Oracle admitted last week that it is considering further acquisitions, after having already announced two purchases since the start of the month, including retail-focused space planning software firm Advanced Visual Technology (AVT).

And Mercado – whose technology is used by many major retailers on their web sites – is to sell its site search and merchandising business to fellow software firm Omniture.

Then this morning news broke that another major IT firm, Novell, has agreed to acquire Managed Objects.

In the case of both the AVT and Mercado deals, their purchasers already own technology that closely integrates with that which they intend to buy.

They are complements rather than alternatives, so retailers using these systems should be encouraged that their new owners will carry on investing in the technology to develop wider and integrated product portfolios.

However, those in the retail technology industry have already seen a huge wave of consolidation in the past five years.

It was a wave that often left retailers running systems without much of an idea of how much longer they could expect them to be upgraded or supported. In the worst cases, it also saw retailers being encouraged to purchase software with little prospect of the system having a future roadmap.

In just the same way that banks and retailers are consolidating to protect themselves through this downturn, it is likely that more of this kind of activity will occur in the technology sector.

Retailers looking at buying new software – there are still a few of them out there – must question their suppliers hard on their future prospects.

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