Software Merger

Problem: A software company is not growing fast enough to keep its stockholders happy

Context: Multiple products competing in a mature (slowly-growing) marketplace

Forces: Solution: What Happens Next: Lessons Learned:


Another Lesson Learned, or perhaps a different take on "self-preservation": -- DaveSmith
In '01 I was working for a company that was acquired. An experienced guy told me what would happen over the next year - which looked awfully like the sequence of events described above. Sure enough, it all happened right on time - I particularly liked the bit about the abortive attempts to weld together products that were intended for different markets and that had totally different technology platforms. A year after the 'acquisition' we all got the bullet - actually with a fair amount of relief all round.

Given that the acquirer is still going, it probably didn't work out too bad. But most software M&As between similar sized companies appear to be terminal for one of the teams involved - any good counter examples?
The best is when an IT group scrambles to create a new project from scratch to justify their continued employment. One of the 2 companies was using state of the art Identity Management software (MaXware?), but instead of integrating it into the new company's domain, the other IT department proposed rewriting an Identity Management solution from scratch (which could easily take 8+ years) and the glossy-eyed manager who has no clue what he's hearing, approved it. Dazzle the PointyHairedManagers? with technobabble in order to keep your job.
It has happened to me, just this very year. Was working for a large market leader financial company who had a very small web-dev team with lightweight products on latest framework providing their web channel for products. Large staid market leader financial company acquires small up-and-coming youth-friendly insurance company with a fantastic successful marketing department. Board of old staid company assumes new whizzy company will have equally whizzy IT which will regenerate its own offering, and forces the two IT dvisisions to merge by giving IT bosses of small whizzy company senior IT roles in large staid company. Bosses then start on a process of 'merging' the two systems, which meant replacing fairly modern lightweight web offerings with their completely UNwhizzy 10-year-old CMS system which was already struggling to cope with the two web products they had before acquisition. I tried to use it.. for almost a year, before moving on. I fear for them.
CategoryAntiPattern CategoryOrganizationalAntiPattern

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