Open source software continues its torrid pace. In fact, according to a report from the 451 Group, the sector saw its biggest quarter for venture funding -- hitting $203.75 million, which is up from $100.4 million in the same period a year ago.

Why the interest? Well, I had a chance to interview Matthew Aslett, who is an analyst of enterprise software at the 451 Group:

Your take on the focus on open source?

VCs are interested in open source vendors because the open source development and distribution models reduce start-up costs and lower the barriers to entry. Some VCs have also cited increased code quality as a reason for investing in open source as the model enables a broader range of product testing and rapid innovation. There are a number of VCs that are sold on the open source model, and some have even stated that they would only consider investing in a software vendor if it was using and producing open source. Open source vendor revenues are lower than more established traditional rivals today, but most vendors are still in their infancy. Recent mergers and acquisitions involving open source vendors such as Zimbra, JBoss and MySQL have proved that the returns are there and are likely to encourage more VCs to look favorably on open source.

On its face, it looks like the tech M&A market is holding up nicely -- despite the credit crunch and slowing economy. For example, in Q1, tech M&A came to $92 billion, which was down from last year's $100 billion (this is according to the 451 Group).

Good, huh? Well, as usual, statistics can be deceiving. Keep in mind that Microsoft's (NASDAQ: MSFT) $45 billion bid for Yahoo! (NASDAQ: YHOO) was a huge factor (interestingly enough, there are signs that the deal may not go through).

In fact, there was a 50% reduction in deals in excess of $1 billion (only 11). For the most part, larger transactions need debt financing -- which is in short supply nowadays. After all, last year we saw a rush by private equity firms into the tech sector.

According to the 451 Group, it also looks like strategic buyers are getting skittish. Simply put, they are concerned about the macroeconomy. And something else: with lower stock prices -- with companies like Microsoft, Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG) and VMware (NYSE: VMW) -- it is more dilutive to do deals.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

So far this year, McAfee, Inc. (NYSE: MFE) has put together a strong turnaround. Now, the company is ramping its mergers and acquisitions (M&A) efforts.

The latest deal is the $51 million acquisition for ScanAlert (there's another $24 million for meeting certain performance milestones). The company, which provides Web security, has customers like Hewlett-Packard Company (NYSE: HPQ), Sony Corporation (ADR) (NYSE: SNE), and Yahoo!, Inc. (Nasdaq: YHOO).

The deal is also a part of McAfee's attempt for "triple play protection," which involves security for PCs, the Web, and mobile devices.

In today's trading, McAfee's stock is up about 1.5% to $40.51. Actually, today the stock hit a 52-week high.

To get more perspective on things, I talked to Nick Selby, who is the Research Director and Enterprise Security Practice Director at the 451 Group.

According to him:

"Hacker Safe is a more solid and relevant product than was SiteAdvisor in that it addresses issues to both consumers and the e-business websites they buy from. This is a good, incrementally valuable tool in McAfee's quiver, with the added bonus of helping bring the McAfee name back to the fore of the consumer market."

Also visit DealProfiles.com to check out other recent M&A deals.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.