Rough Type in M&A
Nicholas Carr’s thoughts on the Oracle/Peoplesoft Merger are interesting, questioning the popular notion that mergers of software firms are horribly difficult, if not inherently doomed.
Mainstream thinking holds that
because the value of software makers lies in the creativity of their “human assets,” […] you couldn’t apply tough management discipline in quickly consolidating two organizations and ripping out redundancy. Cultural friction would get in the way; sensitive knowledge-workers would walk. […] The largest single reason for failure when two software companies combine is cultural incompatibility. Even if the two cultures are similar, merging them can be difficult for a vast variety of technical reasons. […] Whatever the root cause, in the face of fundamental incompatibility, most software mergers fail, plain and simple.”
Carr references Larry Ellison’s approach who holds that he applied GE’s hard-nosed, to-hell-with-culture acquisition philosophy to combining Oracle and PS, and notes some issues, for one that
As we move to a more industrial approach to making business software […] we’re also moving to a more industrial approach to software company management.
more at Nicholas Carr’s Blog
