June 2th 2016
Corporate Mergers and Acquisitions – Friend or Foe?
| Brian Ahearn
There’s a really interesting article highlighting some of the worst tech mergers and acquisitions ever. You can read the article at http://www.zdnet.com/article/worst-tech-mergers-and-acquisitions-hp-and-autonomy-google-and-motorola-and-more/
Lots of M&As are hugely successful but unfortunately the technology industry is littered with failed attempts to grow companies through M&A. What’s worse is the huge number of customers left stranded after their product or service is discontinued following some M&A activity.
There are people far better qualified than me to talk about M&As but having said that, I’ve been through a number of them myself and there are certain characteristics that spell trouble for the merged entity and ultimately, their customers. Overlapping products, the need to massively reduce cost and duplication, executives with competing interests, a merged workforce no longer motivated to innovate, and of course, a customer base worried about their own investment into products and services that may no longer be core to the merged entity; if you see any of these, be worried!
In the MAM industry the stranded customer is all too common. There are many examples of company mergers and acquisitions where products are later abandoned or at best left to function with minimal investment while continuing to drive a maintenance and support stream with strategic advantage to the acquirer only. As a customer what do you do next? Hope might be a strategy that the new entity will at least support your product despite having axed it; the acquirer may even have a better product for you to transition to; you might of course take the opportunity to revisit your requirements and to consider a completely different solution and approach. In any event you are likely to experience lots of anxiety and certainly some disruption to your business.
As corporate executives, we have a responsibility not just to our company, but to the customers who put their faith in our words and products. We have the right to grow our companies and to create shareholder value, but if we look at this from the customer’s perspective and make sure that our approach considers the needs of the company in tandem with the needs of our customers, we will ensure the best outcome for all involved.