How Strategic Acquisitions Go Awry
from the small-deal dept
The software space has seen quite a bit of consolidation over the last few years, with Oracle’s aggressive acquisition spree standing out. Just today it announced the purchase of yet another company, this time in the security space. IBM has made a number of deals as well, as it looks to bolster its high-margin software business, the unit that’s largely responsible for its continued profit growth. Yesterday, the company announced the purchase of Data Mirror, which will bolster its business intelligence offerings. The purchase is not so much about growth, but about adding functionality to its existing offerings. But as Rick Sherman points out, there’s a downside to these small, “tuck in” acquisitions: they create complexity. It’s not so simple to just buy a line of software and meld it into an existing product, as any major enterprise software vendor can attest. Therefore, it’s entirely possible that the customers of Data Mirror (or any company in a similar boat), could look for another simple, lightweight solution that isn’t tied into some larger, behemoth.