The Trouble with Software M&A


Business Strategy for Software Executives	November 12 , 2007
The Trouble with Software M&A Software companies continue to rely on M&A to create shareholder value. Time will tell how long customers will continue to support that strategy. By Vinnie Mirchandani, Deal Architect I’ll be at Oracle OpenWorld this week. Undoubtedly, much of the conversation will surround Oracle’s numerous acquisitions and how the “Fusion” of these products will be a great thing for customers. But will it? What if software vendors took into account customer perspective before they entered into an M&A deal? A long shot, sure, but a day that may come in the future. By no means is Oracle the only offender. But Oracle has long been the poster child for trying to achieve growth and drive shareholder value through M&A. Oracle’s recent failed bid to buy BEA brings to light many of the issues surrounding vendor consolidation. M&A is simply not the only way to create tech shareholder value and in the long term, customer demands may force vendors to rethink their acquisition strategies. Read more >>
Turning Opportunity into Cash Top-line revenue growth is the biggest challenge for many software companies. Mark Gaeto of the Alesco Group outlines six steps executives can take to meet their growth objectives in today’s hypercompetitive markets. Read how in this week’s post to the SandHill.com Blog on Software Growth Strategies. The End of Certification Problems Red Hat recently announced a product for application vendors to use as the basis for virtual appliances which will maintain “certification.” Read why Billy Marshall of rPath says the days of vendor “certified” products are numbered in this week’s post to the SandHill.com Blog on virtualization. Publish Your Perspective! The SandHill.com Blog wants your opinions. Send your thoughts on the enterprise software industry to editor@sandhill.com and we’ll publish them in our blog. DON’T MISS: Cracking the Complexity Code There are two types of complexity. Understanding where to intervene is the key to managing them to create value. Find out the three things that companies must get right in order to realize how to make the most of this Web 2.0 content in this article from The McKinsey Quarterly. News Update: Mobile Maneuvers Dream comes true, goodbyes get grabbed, SaaS gets hotter, green gets rosier and Microsoft’s CIO gets the boot. Read these stories and more software news of the week in the latest SandHill.com Software News Summary. Poll: Buyer’s Input on M&A? Should customers have a formal say in software M&A deals? Take our Pulse Poll >> Last week, readers gave their opinions as to whether the U.S. economy would slip into recession in 2008. Give us your opinion and see the results >> More at SandHill.com: Under pressure, ERP giants struggle to innovate. Read the most important enterprise software industry news of the week >> Zilliant receives $4 million. Monitor the latest software venture capital deals >> Symantec pays $350 million for Vontu. Size up last week's software M&A deals >> Intuit named Neil Williams as CFO and SVP. See who's made it to the top in our list of recent software executive appointments. Send us your feedback on this newsletter and the SandHill.com site. Parting Thought “A project is complete when it starts working for you, rather than you working for it.” –Scott Allen Courtesy of Malcolm Kusher, The Kushner Group	THIS WEEK'S SPONSOR Pagemill Partners LLC was created by successful technology executives to assist their portfolio clients with unprecedented support in all areas of Mergers & Acquisitions. All of the Managing Directors have had significant hands-on experience in building successful companies organically and by way of acquisition. Find out more. SOFTWARE PULSE Software Pulse is a publication of SandHill.com, the online resource for software business strategy. To subscribe, click here. To unsubscribe, see the bottom of this email. Forward this email to a friend Send us your feedback, click here. SandHill.com is published by Sand Hill Group, which provides investment and management advice to emerging leaders in the $600 billion enterprise software, services and solutions market. Sand Hill Group produces the Software and the Enterprise series of conferences for industry executives, and authors research reports on cutting-edge technology topics.