Making Software M&A Work

After more than twenty successful acquisitions, the EMC Software chief shares his formula for M&A success.

By Dave DeWalt, EMC Software Group

Analysts say upwards of 9 out of 10 acquisitions fail. I won’t disagree. The dynamics involved in merging two separate organizations and coming out on the other end a sum greater than the two parts is no easy task.

In my 20 years in technology, my company has been acquired three times and I’ve acquired more than 40 companies. I’ve seen how to do it right – and how to do it wrong.

Most recently, EMC acquired my company, Documentum in 2003. I have to admit the integration of the two companies seemed daunting: We built software, EMC primarily built hardware. We were small, EMC was large. We were West Coast, they were East Coast.

Any one of these challenges could have doomed the merger. Yet Documentum is now a thriving part of EMC Software – a roll-up of more than 20 successful acquisitions over the past three years.

Making successful technology acquisitions is not a matter of luck. EMC’s success comes from a focused methodology that starts with identifying the right target companies and doesn’t end until years after the merger is completed. Here’s a snapshot of EMC’s approach which many are viewing as the benchmark for successful technology acquisitions.

Open Source: Money Pit or Money Machine?

Listen in to this new podcast from SandHill.com. Larry Augustin, chairman of VA Software, and Tom Berquist, CFO of Ingres, join Sand Hill Group’s MR Rangaswami to discuss open source business models, opportunities and challenges. Click here to play the podcast on open source and to see a list of all recent podcasts from SandHill.com.

De-constructing the New Business Architecture

Well-known for his in-depth analyses of emerging software business trends, S. Sadagopan of Satyam, joins the list of featured SandHill.com bloggers with the debut of his blog, “The Deep End.” This week, Sadagopan examines the components of a new technology and business architecture, and how its elements will combine to deliver new value to enterprises.

Has SOA Changed Your Business?

Erik Keller of Wapiti examines the performance claims of SAP’s Enterprise Services Architecture and finds a “status quo nightmare” on the horizon – if true. But how are software vendors doing with their SOA plans? Read Erik’s post to his SandHill.com Blog, The Software Critic, and find out.

Get the Forecast for IT Marketing

Tom Pisello of Alinean synthesizes the findings of the latest market research and spells out what the 2006 market holds for technology sellers, how much they should be spending on marketing and what messages will resonate with today’s buyers. Read Tom’s analysis in this week’s post to the SandHill.com Blog on sales and marketing best practices.

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More Offshore Uproar

India crowned global leader – for thirty more years?! Plus SAP chooses its first Asian services partner, Oracle buys in Israel, McAfee’s options-granting investigation draws blood, and more software news of the week. Read these stories and more news of the wee k in the SandHill.com weekly news summary.

Poll: More Visas for Tech Workers?

The immigration bill passed by the Senate will increase the cap on H-1B visas but does it go far enough? What would be the net impact of more foreign tech workers on the U.S. technology industry?
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New Webinar on Offshoring Best Practices

Software CEOs and VPs are invited to join the Sand Hill Group and Persistent Systems for a webinar, ìTrends, Strategies and Best Practices in Outsourced Product Development.î The online event will be held at 11:00 a.m. Pacific on June 29. Sand Hill Groupís M.R. Rangaswami will provide actionable data on product development trends and Sheng Liang of Seven Networks will share the most important takeaways from his offshoring experience.

Find out more and get registered >>

Watch Software 2006 in Action

A wide range of videos from Software 2006 are now available at SandHill.com. Full presentations by keynote speakers such as CK Prahalad and Dave Dewalt of EMC Software (author of this weekís lead story on M&A strategy), panel discussions by pundits and CIOs, as well as full coverage of the Software Showcase presenters are now online. Click here to see the full list of videos and watch now!

More at SandHill.com:

HP, EMC bid for Mercury Interactive.
Read the most important enterprise software industry news of the week >>

Chinaís Worksoft receives $30 million.
Monitor the latest software venture capital deals >>

Double-Take Software buys Sunbelt System Software.
Size up last week's software M&A deals >>

Alterpoint names Scott Harmon as CEO.
See who's made it to the top in our list of recent software executive appointments >>

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Parting Thought

“It is better to be prepared for an opportunity and not have one than to have an opportunity and not be prepared.”
- Whitney Young, Jr.

Courtesy of Malcolm Kusher, The Kushner Group