The most popular and comprehensive Open Source ECM platform
Let us know more
Enterprise Software: Are Customers Winners After Megamergers?
Oracle, IBM, HP and SAP have been on a buying spree. Billion dollar plus purchases have become the norm as enterprise software companies are rapidly consolidating. In general, shareholders have been pleased with the transactions, but customers of these vendors have been less thrilled.
Here’s just a sampling of some of the recent activities:
| Target | Acquirer |
Deal Value in billions |
Date |
| BEA Systems | Oracle | $6.7 | Pending |
| Cognos | IBM | $5.0 | Nov ’07 |
| Business Objects | SAP | $6.8 | Nov ’07 |
| Opsware | HP | $1.6 | Sept. ’07 |
| Hyperion Solutions | Oracle | $3.3 | April ’07 |
| Internet Security Systems |
IBM | $1.4 | Oct ’06 |
| FileNet | IBM | $1.6 | Oct ’06 |
| Mercury Interactive |
HP | $4.8 | Nov. ’06 |
| Siebel Systems | Oracle | $6.1 | Jan. ’06 |
| PeopleSoft | Oracle | $11.1 | Jan. ’05 |
A Wall Street Journal article found that post-merger many customers see no difference or a drop in responsiveness from the vendor. On the postitive side, things are better than they had been in the 1990s. Back then, typically after a merger, the acquirer would often cut back severely on product development and support funding. Software would fall out of date and be poorly supported, causing customers to migrate to new platforms. The trend at that time also was for large companies to purchase much smaller ones.
So life is somewhat better for customers of acquired companies. Vendors like Oracle, IBM and HP are not forcing customers to migrate to their own products after the merger. A major reason for the change is that now the companies being purchased are already of goliath proportion. These are companies that are already very well established and have very many customers.
But while customers of acquired vendors are in better shape than back then, there are still problems. Many customers hope to see software synergies after mergers, but in many cases that isn’t happening. Melding different software together is tough to do well. Oracle is on the front-line talking software Fusion, but it’s still really years away — products like Oracle and PeopleSoft have yet to fully come together.
Acquisitions mean there are fewer players and less competition now than there used to be, which ultimately means higher costs for customers.
