Friday, July 31, 2009

A comment or two on acquisitions

Given the latest news about acquisitions in the BI space, I feel I need to make a few comments. No doubt this will be viewed as provocative. That's not my intent. This is just my honest opinion about the subject.

Acquisitions don't typically add value or benefit customers. The real beneficiaries are shareholders and executive management. Wall Street likes acquisitions. Investors and investment banking-types make tons of money.

Me, I like money too. However, I would prefer that people/companies make money by adding value. By adding value I mean inventing something new, building great companies that make great products and support their customers - and not looking for a quick and lucrative "exit". I mean adding competition to the market - not reducing or eliminating it.

Sadly, when acquisitions occur, value is often lost. Products are discontinued (or simply "supported"), key employees are RIFed, and customers lose their voice and the influence that they once had. New product features? Get in line (a long one). Your own user group conference? Not any more. You can have a breakout session in our mega conference.

There are still a few independent vendors out there. But for how long? When a larger vendor offers 5 - 6 times trailing revenues in cash, it's hard to say no. Perhaps the remaining independent vendors could make a pledge to stay independent? Okay, that's probably a bit naïve on my part.

The larger question in my mind is: how do organizations re-take control of their own destiny? While not necessarily an advocate for things like open source, I do wonder if it wouldn't provide some protection against the ongoing M&A frenzy in the market.

I would like to know what you think. Post a response!



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