Pelz-Sharpe Alan Pelz-Sharpe

Why software vendors acquire others

15-Oct-2010

Tags: Digital and Media Asset Management, Document Management (ECM), Enterprise Collaboration & Social Software, Enterprise Search, Portals and Content Integration, Web Content and Experience Management, Marketplace at Large, Selecting Technology, Vendor Viability & Financials

My post yesterday about Autonomy reminded me to explain a bit more about software vendor "roll-ups" and what they really mean to you the customer.

It's important to note that there are many reasons vendors acquire other vendors:

  • To gain market share
  • To acquire a healthy maintenance revenue stream
  • To improve efficiency (think layoffs), contributing to the bottom line without too much further investment for a few years to come
  • To fill technology gaps -- the most common rationale put forth publicly, but least common in reality

Frankly that's just scratching the surface of the why's and how's of acquisitions, but my point here is to caution you to do your homework thoroughly and not simply assume that a product from a big company is stable and has a long life ahead of it.  When acquisitions happen, product futures can become very murky.

You are making a long term investment and commitment; is the company you are buying from doing the same?

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