Given the scale of recent acquisitions, such as those by Oracle and eBay, it is worth looking at how some past mega-mergers worked out.
One example is i2 TECHNOLOGIES’ $9.3 billion purchase of Aspect Development in 2000. It was the largest ever software merger at a time when analysts were predicting that, by 2003, $1.5 trillion worth of business would be done via B2B hubs. Enthusiasm for e-marketplaces dwindled and in November 2005, i2 finally sold its content and data services division (of which Aspect’s software was a key element) to manufacturing and engineering specialist IHS for just $30 million.
Such experiences might explain why the vast majority of today’s acquisitions are small, tactical deals that fill gaps in larger vendors’ portfolios.
MICROSOFT snapped up two niche vendors: MEDIA-STREAMS.COM, which builds SIP-based Internet telephony ‘softphones’ to enrich its Live Communications Server collaboration product; and FOLDERSHARE, whose peer-to-peer file sharing and synchronisation software will be added to the Windows Live online consumer service.
In a similar mood for plugging gaps, SAP paid around $100 million for KHIMETRICS which sells price optimisation and demand intelligence software. Building on its September purchase of point-of-sale software vendor Triversity, SAP is now better positioned in the retail market after losing out to ORACLE on retail specialist Retek.
Oracle’s own purchases were relatively modest. User provisioning vendor THOR TECHNOLOGIES and virtual directory supplier OCTETSTRING boost its identity and access management (IAM) portfolio to integrate with its business applications, database and applications server.
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