We walk through the dark corridors of time, as the software industry gets on with it’s midlife crisis. Now, who doesn’t talk about the hostile takeovers? At a point of time in 1995 to be exact, IBM’s hostile takeover of Lotus was considered a sin, the reason being it was the first hostile takeover ever in the software industry. But now, as the bubble starts to burst, IT companies have no more options but to get consolidated. Consolidation is too polite a name to be given for the hostile takeovers of bigger corporations on smaller or their contemporary competitors. Be it the Oracle’s hostile takeover offer of Peoplesoft or the Microsoft/Sap merger and Sun’s plans on buying out Novell, consolidation is everywhere.
This statement of Larry Ellison, CEO of Oracle Inc reflects how the bigger corporations suffer from the merger syndrome “We wanted to be a survivor and a consolidator, and we felt the only way to survive and prosper was through acquisition,” Ellison said this in June.
An article in ZDNet called Survival of software’s fittest, by Martin LaMonica triggered me to write this post. A passage from the article says, “The worst job in the world right now is a software salesman–there are too many software companies fighting for too few dollars in the marketplace.”
I just loved the article for the facts that it reflected. Read it fully if you in anyway related to the software industry.
kirukkal.com 
7 responses to “Takeovers/Consolidations – Order of the day”
Guru
There is no Microsoft/SAP merger….They had talks but they had called it off..
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Guru
There is no Microsoft/SAP merger….They had talks but they had called it off..
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Lazy, there is no reason for doom and gloom. Consolidation is a standard evolution step in any maturing market. There were 90 car companies once, finally coming down to 3. Same idea.
One of the things consolidation will do is make the task of a software salesman easier 🙂 – just unfortunate if you’re on the sales team of the acquired company!
SUN’s plans on buying Novell is also not more than a rumor (just like the intention to merge MSFT and SAP).
My $.02…
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Lazy, there is no reason for doom and gloom. Consolidation is a standard evolution step in any maturing market. There were 90 car companies once, finally coming down to 3. Same idea.
One of the things consolidation will do is make the task of a software salesman easier 🙂 – just unfortunate if you’re on the sales team of the acquired company!
SUN’s plans on buying Novell is also not more than a rumor (just like the intention to merge MSFT and SAP).
My $.02…
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Yep, I do know that MS/SAP merger is not happening by their press release two weeks back. There were however talks and the news of merger itself came as a shock to the computing world.
Anand, I wasn’t trying to project a dommsday by this consolidation process but trying to highlight the fact that even the bigger corporations are hunting for mergers/acquisitions.
My personal thought is, even if you are a last level employee of the acquired company, I think it’s unfortunate.
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Yep, I do know that MS/SAP merger is not happening by their press release two weeks back. There were however talks and the news of merger itself came as a shock to the computing world.
Anand, I wasn’t trying to project a dommsday by this consolidation process but trying to highlight the fact that even the bigger corporations are hunting for mergers/acquisitions.
My personal thought is, even if you are a last level employee of the acquired company, I think it’s unfortunate.
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More than Sun, IBM is likely to buy Novell. If not complete acquisition, atleast some stake because it is a scary thought for any hardware and solutions vendor to leave the OS in the middle to a third party.
Sun already has Solaris and is likely to continue focus on it.
Lots and lots of software acquisitions can be expected. Along the lines of niche players getting gobled by biggies. Too much idle cash in the bal sheet of s/w comps is not the only reason.
Cheers.
Sat
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