Slashdot Mirror
Software Companies - Merge or Die?
pillageplunder writes "This article in Businessweek points out that large software companies like Siebel, BMC and Veritas are all warning that 2nd quarter results would be lower, and predicts a shakeout. According to the article, 'Investment bankers say half of the sector's 600 publicly traded companies are likely to be eliminated.' Ouch!"
Once that happens, won't that mean about 75% of publicly traded companies will be gone since the dot com bust? A second round, I guess.
I hope the company I work for never goes public. I'd rather stay small and slightly profitable than get a whole bunch of money and blow it.
I am a programmer for a medium sized private company. We have recenlty had 3 of our 12 IT staff leave in the past 2 years. Problem is, we have not replaced them. Even though we are not a "software" company, our IT staff seems to be on a downward spiral. I doubt we will be bought out, however, it worries me that our owners are all in there SIXTIES! I am taking realestate classes in the fall, to try and get into some part-time appraisal position. Good luck to the rest of you that stick it out. I still got a couple years in IT, but whos to say anymore!
Rocco
Why don't companys just change their values instead of trying to screw people? There was an article about bad customers on slashdot earlier and I think a bigger problem is poor treatment of customers. Seriously look at all the marketing where there are large rebates instead of just marking the product down to a more reasonable rate. All the rebates done hoping the people won't be able to collect on them later. This isn't exactly friendly business. Large companies who's values are supposed to be integrity and people are firing their workers and trying to cut every corner just to raise their own stock options. Wouldn't it be better business to make better products and hire people from the countries that you are selling to instead of making products that break and sending your money to other countries. Aren't large companies in effect draining the economy that they are trying to tap with their current business plans? I think business should just try to do a few things to improve their products. 1)Make things right the first time. I can't tell you how many companies I've stopped buying from cause their products are flawed. 2) Value people. Give friendly customer support and stop trying to give every excuse in the book not to work. If you offer a warrenty you should honor it for everyone and not just big business.
A couple billion will give them a couple bucks each. Yeah, real big boost, there.
Read jack phelps dot net
Open-source is the Japanese motorcycle industry. At the moment, we're about where motorcycles were in the late 1970s - they're pretty good, and they work and work well. But we haven't reached the Honda CG125 (a million pizza-delivery boys can't be wrong), or the mighty mighty Fireblade, yet...
It's an interesting comparison between Japanese innovation and quality control in motorcycles and open source in software but aren't you missing one huge disconnect? The Japanese approached innovation with a single-minded, extremely rigourous and well thought out approach to making quality affordable. Linux currently has no focus, no rigour and isn't well thought out. Where the Japanese found the set of qualities that made their products universally accepted, Linux is busy finding the qualities that make it accepted for infinite variety. The two examples might end up with the same market results but it won't be through the same process. In fact, the first Linux company that acts like the Japanese will likely have more success than all the other OS developers together.
Thankfuly for the rest of us, the economy is made of more than just software makers.
T Money
World Domination with a plastic spoon since 1984
Here's an idea.... INNOVATE or die. Companies merging is not part of the capitolistic system. The idea is that you produce good enough products that enough people will pay to get them. Merging is just the corporate pyramid scheme.
Just as Time Warner how great their merger with AOL worked out...
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
Sorry, but the self-destruction of the software industry has almost nothing to do with presidential politics. It is largely the result of the life cycle of the industry itself.
/.ers routinely deride this concept.
Most of the big software companies existed because their was a perception that the companies were building up equity in intellectual properties.
As OSS is set against the corporate (capitalist) software industry, it seems that threads like this should be entirely about celebration...and the big question should be about how to coerce failing software firms into liberating their source code into the public domain as they close their ledgers and dispense any remaining funds to shareholders.
The real problem is not that software companies will continue to fail, but that they are leaving large numbers of customers with closed systems and no support.
Please, don't misunderstand, bashing Bush for any negative news is desirable. But, I really can't see how Bush is responsible for the natural life cycle of an industry. It also seems strange to be blaming someone for the failure of a business model that OSS opposes.
I agree that it is wise to blame one's enemies for the necessary outcome of one's actions. I certainly don't want to be blamed for follow programmers losing the livelihood, but isn't the fall of corporate giant software firms the goal of a free software movement?
The failing businesses were all founded on that strange IP model that OSS rejects. The failing companies were built on the assumption that they were building an abstract thing called IP, and that they were re-investing this IP to create more IP.
Bush and his cronies were in the lead in trying to defend this IP.
It seems strange to blame Bush for not succeeding in stopping the outcome of what we desired to happen....the fall of corporate owned software. It seems to me that if you are against IP, then this article should be a cause for celebration.
Hardware, too, will be "open sourced" when molecular manufacturing "replicators" are as common as the computer-on-every-desktop (in less than 20 years). And this nano-revolution will be just sliiiiiightly more disruptive than the info-revolution.
e.g. Nobody'll need Gillette's expensive razors when you can make your own carbon-blades at home using recycled molecules + solar energy + nano-bootstrap-assembly-process + GNU-carbon-blades-v1.1-blueprint.tgz, just as nobody'll need ADM, Monsanto, or CocaCola when they can recycle their old garbage matter into fresh food (that was previously scanned with atomic precision or designed virtually from scratch).
Unless Microsoft and the rest of the megacorps succeed in cementing their monopoly power with the help of fascist government, we'll be waving goodbye to them soon enough; in their place will be thousands of self-sufficient open source hackers.
--
Power to the Peaceful
1) Adding engineers to a software project only makes it later
2) Dueling projects. The more politically powerfull will win
Consolidation is only natural among relatively "young" business sectors ("economic history" is rife with examples). With the proliferation of companies in the sector, overlapping product offerings, finite market size and the struggle to offer REAL value propositions to customers it's rather inevitable.
;-) ).
Now if you add the unique trends that are pressuring this sectors consolidation like Open-source and "off-shoring" it's rather a surprise it's taken this long for the media to recognize it. Let's face it the software sector has grown bloated and in a lot of cases has lost touch with customers needs. A good "shakin-up" is just the ticket for improved quality and reasonable margins (re: pricing).
It's a great strength of capitalism that the market eventually will grab a shovel and bash in the heads of those companies whose demise will lead to better value for the customer (well that's the theory anyways
I am thinking that all of these large corporations are using this P2P scare to their advantage. Music industry, Movie industry, and the Software Industry are all having " huge problems because of people stealing their products". I believe the MPAA reported something in the range of a billion dollars for overall profit in the industry last month, a new record gross. Yet they are doing poorly? Software companies now must merge? looks like a good excuse to form a bunch of microsofts aka trusts(fat cash cows with no inovation, no competition, and nicely equiped with a perfect scape goats) but digitizable industries are building up resentment and "statistics" all in line for congresses upcoming legistlation against P2P software. ...well, either that or open source software is just plain cleaner, cheaper, and more inovative that anything they could ever accomplish, and is becoming more and more availible to the "user". Either way everyone needs to stop feeling sorry for thes companies, they are just getting their "come upins". Especially the turd that won't flush: figting all the way down(microsoft)
Technological comapnies have had a boom/bust cycle since the 1940s with the Manhattan Project taking most talented engineers and then dumping them once "the bomb" was developed. This was also repeated in the 1960's with Apollo program sucking up Electrical Engineers like there was no tomorrow (together with mechanical and in some cases civil engineers as well) then with the cancellation of Apollo 18 the whole situation collapsed.
Go back and read what the employment situation was like for Electrical Engineers back in the 1970s was like. I heard figures close to 50% unemployment for E.E.s during at least part of the '70s. What this did was set the stage for massive entrepreneurial growth, because suddenly massive amount of highly trained talent was available to move into new directions rather than being consumed by these massive projects.
Right now I see the same sort of thing happening in the software industry, where college CS graduates are being "bought" for cheap and there is quite a bit of entrepreneurial activity to start the next wave of software companies. It won't be the companies that you are familiar with, or even writing the kinds of software that has been written before. It has been done before, which is why it won't be done.
There are a lot of companies right now that are working "under the radar", that aren't a part of that 600 that will be doing the mega mergers. One problem, however, with all of this merger, fallout, and new company cycle is that software developers are kinda out in the cold as they get older, and glowing pension plans and 401K plans mean next to nothing when you really think about it. What this means when large numbers of software developers start to go grey remains to be seen.