Aquisitions

Every time I hear this term, knowingly or unknowingly I think about that for a moment. Lately I have been hearing this term every day. The latest trend in the IT market is to set up a start up, gain some user base and advertise its potential to some big players in the market and merge with one of them. Is it good or bad? Well it has two sides of argument, good because it will be integrated with a large suite, more money for development and more marketing. Bad because of layoffs, dominance of few market players and loss of product individuality. Whatever may be the effect, acquisitions keep happening. One of the interesting thing about acquisitions is that they keep me guessing about how a company is planning its growth. For example Google, this one has a wide variety of acquisitions. It has acquired many firms which have products varying from social networking portal in mobiles to wireless softwares to video conferencing to network file sharing to online office softwares. It has a very good strategic approach in its acquisitions unlike others. For example eBAY, which acquired Skype few months back. I was perplexed by this aquisition, basic question: why would a bidding site needs a VOIP product? I thought it was a bad move, and now we have news indicating that ebay overpaid for Skype and it has been under-performing after the acquisition. There are few rumors now that Google is planning to take over Skype from eBay. This move by Google(if true) makes perfect sense because of the open handset alliance initiation by google, and Skype VOIP mobile system fits this model perfectly.

Now here are some big acquisitions that happened in the recent past, which opened up so many questions to think about.

SAP taking over Business Objects, Yup the ERP giant is sleeving up to take over BI giant. Many say this might be a result of
Oracle taking over Hyperion early this year and I think they have a point. Oracle with its strategic acquisitions like that of people-soft was already poising a threat to SAP's business. With the addition on Hyperion now it has entered the BI arena, only to make its suite even more powerful. SAP has a pretty good customer base in the Enterprise applications, now BO will give it an opportunity to explore data warehousing and BI arena. Is this good or bad? It really depends on what SAP does with BO. Right now it stated that BO will be a separate entity. If it continues to keep it like that, its good. But if SAP tries to integrate BO into its exisiting software to give its customers more functionality, then there is a good chance of loosing BO's customer base. SAP may also invest in enhancing existing BO tool. We need to wait and see what will its approach be! What are other players in the BI world doing? Well they are doing their own strategic acquisitions, to protect their position in market. IBM took over another BI giant Cognos, to enhance its information on demand suite. As the article indicates, it has already done many such acquisitions and Cognos only adds strength to its ideas. Also SAS takes over Netezza, Informatica takes over composite software, etc. Tough competition going on there in BI market.

Coming to other areas, Google acquires a Jaiku, a so-called micro-blogging website. According to google blog, this will help people to stay in touch with their loved ones either from a computer or from mobile. Where will google use this application is still to be answered, after all google want to do everything. Web search, images, videos, mobiles, office, maps and its money maker ads. So, at least for me, its difficult to see where will it use this particular technology!!


Cisco adds securent, a policy management software firm. According to eWeek, The acquisition brings to Cisco technology that allows customers to administer, audit and enforce access policies to a wide range of applications, data and infrastructure. eBAY acquires an online sales tool called Afterbuy.com. This on-line tool can be used for inventory management and pre-sales management. Hopefully this acquisition will not turn out like Skype.

So, acquisitions can bring a company good business or kill the same. How strategic a company is in its acquisitions depends on the fields that a company wants to grow. Acquisitions continue to happen because no one wants to reinvent a wheel!