That's a very good point. I wish it were Microsoft, Facebook, or Google. But IBM is not the worst case scenario.
At least it wasn't Oracle
51–60 of 146 posts
Re: At least it wasn't Oracle
#52I've worked for companies that got acquired and also acquired other companies. Year 1 is usually nothing and things stay the same unless there is some serious fat that needed trimming. The interesting years are 2 and 3. That's when the parent company tries to optimize things (e.g. streamline the sales force), create synergies, etc and you start seeing the changes. Depending on where you are in the acquired company, i…
So right! It's been a career-long joke to me to contrast the language in the merger press release about immediate “synergies” and “efficiencies” with the “com.oldcompanyname.foo.bar” in the code 15 years later. Basically the “immediate efficiencies” are laying off the recruiting and payroll people…
I think in most cases the synergies are thinning out rather fast, and the only positive effect that truly grow is financial muscles. If you do not depend on aggressive funding I suspect growing inefficiencies and complexities are the major forces.
An example from a customer that confided that after merging 8 national processes for reporting to various government agencies, the total running cost was unexpectedly almost 8 times higher than before due to the increased complexity and the amortised investment.
I suppose people know this, except the worst kind of bean counters, so this move is primarily motivated by “product brochure“ enhancement, absorbing a competent competitor that show some promise in a strategic area for IBM. The OpenShift business is just another mainframe in IBMs rather long history of "hybrid cloud“ strategy. They've been doing it for 50 years.
Re: At least it wasn't Oracle
#53Having been in Chris' shoes (being acquired by IBM) I found the reactions of different people in the company most interesting. Several people had the same sort of "Everything is different now that IBM owns us." reaction, but if you unpack that, the reality is a bit different. For a company like Redhat I can't imagine it will be largely changed in the first couple of years at least, so for that period of time you will…
> What will be different will be access to a company that has been running for over 100 years and evolved over that time, at all levels. Facilities all around the world. Access to some of the scientists that you may have only read their papers but now can chat with via slack.
I too was in similar shoes. While I agree with much of what you wrote, I disagree with this point. The size and compartmentalization of the company precludes cross-department access.
Re: At least it wasn't Oracle
#54I've worked for companies that got acquired and also acquired other companies. Year 1 is usually nothing and things stay the same unless there is some serious fat that needed trimming. The interesting years are 2 and 3. That's when the parent company tries to optimize things (e.g. streamline the sales force), create synergies, etc and you start seeing the changes. Depending on where you are in the acquired company, i…
I ran Engineering for an acquired company and that's pretty much exactly how it went down. You may have actually named the company in your post!
Year 1 was business as usual with things not changing a lot, but some integration work starting. That morphed into "we need to rewrite all of your software to make it better" which then turned into what turned into "build exactly the same thing but in a different language". We were a remote office and as attrition occurred, headcount was either not replaced or replaced by an equivalent at HQ. Morale and productivity were in the toilet with the prospect of basically a line-by-line rewrite that merely translated things to another language without actually addressing existing technical debt. I ended up walking away from almost 7 figures worth of unvested stock.
Re: At least it wasn't Oracle
#55IBM aquisition is not bad in my point of view, it is big corporation which guarantees stability to the employees.
I’ve worked with IBM for the past 25 years of my life in public digitisation. They are the worst partner we’ve ever had, the absolute worst.
They sell things they can’t deliver, they never drive technology forward unless you pay them to, and then they get angry and confused when you pick someone who didn’t stand still over them.
Back in the day, almost everything we did ran in IBM mainframes, next year we’ll be signing away our last contract on any of our 500 different IT systems with IBM and we’ll never do business with them again if it can be avoided.
And that’s saying a lot, because I think most companies who sell software to the public sector are terrible leeches, but IBM always took it one bit further and never understood why no one loved them.
I mean, they still don’t get why nobody wants watson, and keep on trying to sell it, never realising that what it does for BI is stuff we automated almost a decade ago, and what it does for deep learning is so much worse than some of the smaller setups that you can scale by running them on AWS or Azure ( probably other clouds as well, but being public sector we’re in Azure and AWS ).
I think this will be absolutely terrible for redhat, and we’re already making exit strategies for the two jboss setups we have for when it becomes necessary in a few years.
Re: At least it wasn't Oracle
#56Theoretically someone could hire a bunch for Red Hat people and continue the business without too much interruption. The software is open source after all. Granted, the infrastructure would not come along and they couldn't use the trademark. But if I'm a customer and my rep tells me "yeah we had a mass exodus over to XYZ corp and are now supporting largely the same Linux stack under a different name" I may well take my business over there.
Re: At least it wasn't Oracle
#57Earlier quoted context omitted.
> The interesting years are 2 and 3. Indeed, after all what would be the point of going through the trouble of acquiring a company if major changes weren't coming ? If you don't need something special, there is a myriad of other option from simple client account to investment or the various partnership level, including shared owned subsidiary for R&D/other.
Conversely, what would be the point of going through the trouble of acquiring a profitable company and trying to impose disruptive changes rather than sitting back and raking in the profits? AFAICT this is what Berkshire Hathaway does, and it seems to work out well for them. (Though this isn't necessarily intended to deflate any fears about IBM meddling at Red Hat; for a company as important to OSS as they are, any c…
Berkshire Hathaway is a different animal, it's a value investing play -- they have access to cheap cash and need a home for it.
Re: At least it wasn't Oracle
#58Earlier quoted context omitted.
Conversely, what would be the point of going through the trouble of acquiring a profitable company and trying to impose disruptive changes rather than sitting back and raking in the profits? AFAICT this is what Berkshire Hathaway does, and it seems to work out well for them. (Though this isn't necessarily intended to deflate any fears about IBM meddling at Red Hat; for a company as important to OSS as they are, any c…
Eg look at the acquisition of Anheuser Busch by InBev. AB was a profitable company, but InBev is just very good at efficiency in brewing. IIRC they paid handsomely above market price at the time and were able to translate their efficiency to AB in such a way that the combined reduction in cost and uptake in revenue creates value net/net for InBev (and therefore AB)
But what is IBM truly good at that can be applied at Redhat? A lethal legal department? Super efficient HR processes? Office supplies management?
I doubt something in engineering and sales? Or perhaps sales is the closest answer.
Re: At least it wasn't Oracle
#59I've worked for companies that got acquired and also acquired other companies. Year 1 is usually nothing and things stay the same unless there is some serious fat that needed trimming. The interesting years are 2 and 3. That's when the parent company tries to optimize things (e.g. streamline the sales force), create synergies, etc and you start seeing the changes. Depending on where you are in the acquired company, i…
The interesting years are 2 and 3. That's when the parent company tries to optimize things (e.g. streamline the sales force), create synergies, etc and you start seeing the changes.
In my one experience with acquisition, that's when upper management's bonuses got tied to "synergy" metrics and suddenly everybody had to learn a new relationship to reality. Almost everything we did for a whole year was dedicated to gaming those metrics, and our independence as an organization depended on supporting upper management's assertion that we were saving tens of millions of dollars. The opportunity cost in product development was enormous, but it was subtly and not-so-subtly communicated to us that now that we were part of BigCorp, we shouldn't worry about small time stuff like keeping things working and making customers happy. At least not in the reflexive, focused way we had before. Making and keeping deals was 15-dimensional chess to them, and they would tell us exactly if, when, and to what degree the dimensions of quality and product delivery mattered. Meanwhile we should do as little product work as possible and focus on the goal inflating executive bonuses by claiming imaginary synergies through integration.
Re: At least it wasn't Oracle
#60I've worked for companies that got acquired and also acquired other companies. Year 1 is usually nothing and things stay the same unless there is some serious fat that needed trimming. The interesting years are 2 and 3. That's when the parent company tries to optimize things (e.g. streamline the sales force), create synergies, etc and you start seeing the changes. Depending on where you are in the acquired company, i…
My experience of having been through 3 acquisitions: the person driving the process from the acquirer who says nothing will change genuinely believes it.
But a year later he will have moved on to his next role and the business unit the aquiree became now reports to a manager who doesn't see why you are "special" and should be treated any differently to her existing department. That's when things really change.