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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!"
Oh...wait....
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.
in mature industries you can count members with the fingers of your hands
At least we're keeping Pud busy... ;)
std::disclaimer<std::legalese> sig=new std::disclaimer; sig->dump(); delete sig;
Without competition software will just get worse, with no need to improve.
Large companies have a tendency to acquire smaller companies and keep them as a separate department, but they inevitably get phased out over time and absorbed into the larger entity. How many people really want to deal with the software giants past a point?
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.
Its going to be ugly in software. 75% of firms are on borrowed time.
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...
Funny that Veritas would be one of those mentioned. Their software is overly cumbersome, they have a poor selection of information online, the cost of support has increased every year. Unfortunately, there isn't much in the way of competition- they have a lot of features that nobody else offers.
I keep forgetting my place. Jesus is for losers. Why do I still play to the crowd?
Don't ever make your company public. Once you do, it stops being a company and instead a money-collector. Instead of a commercial entity which produces (hopefully) a superior product, you are controlled by people who more than likely don't give a rat's ass about what is made, unless it's money. This is the problem, they don't care how the money is made, so they'll press for cutting corners at every opportunity, and make a prime target for "mergers". Mergers are just an excuse to cut even more corners, by taking advantage of economy of scale. However, once one player in the field does this, the others must follow or be eaten up. Thus is perpetuates until we reach a number of large companies which are too large and bloated to react to demand and conditions, and fudge the books, or stifle innovation in order to keep what rightfully should be a corpse alive. True innovation will always be carried out by dedicated individuals or small groups, possibly in a private company, but these large ones are just disasters waiting to happen.
Good, go, that means there will be more jobs for those of us who are both qualified AND actually like what we do...
Sometimes I wonder if some of the trouble the IT industry got into was when IT became the highest-earning after-graduation major at many colleges. I was in college in 2000 and I saw many students who just plain did not understand their computer at all trying to learn how to be an IT geek just in hope of the money... it wouldn't surprise me that such people are now moving on to the next big thing now that IT isn't so hot anymore.
I really have a tough time relating to an article that has to explain that IT is an accronym for info-tech. Stupid analysts are just guessing anyway, half of software companies being gobbled up seems a bit overstated.
in bed.
In general large software companies are, for lack of a better word evil. They produce inferior products at criminally high prices, industry rates for ASP development are still at $200 - $300 / hr, MS spends 300k per year per employee. The developers are certainly not getting most of this money and the clients certainly not getting good work or code for these horrendous rates. The large software companies produce the poor products and rely on slick marketing to the sell their products to ill technically informed clients/managers. These companies seems to use the strategy of charge the client as much as possible, pay the developers as little as possible, both client and developer get screwed, managemeent gets rich for nothing. I think its a good thing many of these companies are going away, its just their scam is over. Its not that people don't need software, its that the're tired of getting ripped off for it. I believe that these companies are just being replaced or put out of business by small companies and individual developers working directly for non-tech clients. Its the big US companies that have been the most enthusiastic about replacing US workers with H1-B's outsourcing etc, small companies tend to use better quality, long term local talent. Anyhow this seems like the trend I've seen. Due the large availibilty of developers, cheap bandwidth, cheap hardware, and free development tools/platforms, its seems like the large companies are going to have ahard time, but I think this will be better in the long run for both developers and clients/users. M
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
Maybe the mergers will lead to more jobs, but my guess is that most mergers will be followed by layoffs (and possibly more overseas outsourcing).
The hemorraging of outsourced jobs will stop once the first big security problem arises. Be it, proprietary code stolen, trojan horse inserted (perhaps by a foreign government), etc. Unfortunately, it'll take something of this magnitude to make companies realize that the short-term dollars saved in outsourcing will cose them long-term when the real problems arise.
...these "investment" bankers are the same toads which suggested Timer-Warner merge with AOL and the many other content & distribution companies which are all now being sold off in pieces (i.e. DE-merged).
As such, I hope these software companies ignore this "advice". These bankers are proven investment moron in it for themselves and their greedy friends.
The only benifit to this might be we'll be able to see some more perp walks on CNN.
Rich...
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