Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of software-as-a-service (SaaS) provider Ultimate Software Group (Nasdaq: ULTI) popped by as much as 11% today before settling down to close out with a gain of 6% after cloud stocks got boosted by M&A activity.

So what: SuccessFactors (NYSE: SFSF) is being acquired by German software giant SAP (NYSE: SAP) in a deal valued at $3.4 billion. The deal carries a 52% premium and is giving hope to other cloud-based investors that industry consolidation may lie ahead.

Now what: Other cloud stocks jumped following the news, including Concur Technologies (Nasdaq: CNQR) and Taleo (Nasdaq: TLEO). Ultimate Software specializes in human capital management SaaS and human resource management solutions. The HR management market is estimated around $3 billion and counting, which may prompt large enterprise behemoths like Oracle (Nasdaq: ORCL) and SAP to pick up smaller shops.

Interested in more info on Ultimate Software Group? Add it to your watchlist.

Fool contributor Evan Niu holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.