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10 Microsoft Acquisitions and What They Mean Now

FrankPoole writes "CRN takes a look at the past five years of Microsoft's acquisition history, which totals $13 billion and more than 7,000 new employees, and highlights 10 deals and how they've affected the software giant. While some larger acquisitions stand out for better or worse, such as Danger and aQuantive, there are some smaller, blink-and-you'll-miss-it deals that have proved pivotal for Microsoft's push into new areas such as virtualization. And Microsoft's recent acquisition track record may lend credence to the heavy criticism levied against the company by former employees like Dick Brass."

43 of 145 comments (clear)

  1. Smart buys by N3tRunner · · Score: 5, Insightful

    Most of the companies on that list were intelligent purchasing decisions by Microsoft, even if all of them didn't pan out in the end. Most of them even have examples included of where their input has specifically improved Microsoft's products. I think that Dick Brass's article in the Times was fairly harsh, but if what he says is true and Microsoft no longer has the capability for innovation, then buying innovators with their still-impressive supply of cash and then successfully integrating their work into their products is a good substitute for coming up with those ideas themselves. It's certainly not ideal, but it can work as long as they still have the funds to do so.

    1. Re:Smart buys by morgan_greywolf · · Score: 2, Insightful

      Innovation at Microsoft ended long, long ago. Microsoft has failed to produce a single innovation that it has not outright purchased for a at least a decade. And no, ClearType is not an innovation: others were doing subpixel font smoothing well before ClearType came along. The sad thing is that without the ability to innovate internally, they will lack the mobility to survive the coming storm of change in their industry. Vista failed to deliver innovation in operating systems, Windows 7 is just Microsoft playing catchup with Apple, Azure will fail to secure a Windows monopoly in the cloud. Microsoft makes hundred-billion-dollar profits because of their monopoly position. Once it starts slipping -- and it already has -- they must either learn to become an equal player in the industry or they will die.

    2. Re:Smart buys by alen · · Score: 4, Insightful

      and how is this different from Apple and Google which are current tech rag favorites? both are on a buying spree. Almost every new Google service in the last few years has been based on a company they bought. just like Apple's multi-touch was as a result of a tiny startup they bought a few years ago

    3. Re:Smart buys by oldspewey · · Score: 3, Funny

      Their days are numbered ... you just choose to pick a really big number.

      --
      If libertarians are so opposed to effective government, why don't they all move to Somalia?
    4. Re:Smart buys by Anonymous Coward · · Score: 5, Insightful

      I think that Dick Brass's article in the Times was fairly harsh, but if what he says is true and Microsoft no longer has the capability for innovation, then buying innovators with their still-impressive supply of cash and then successfully integrating their work into their products is a good substitute for coming up with those ideas themselves. It's certainly not ideal, but it can work as long as they still have the funds to do so.

      I think you missed a key point of Dick Brass's article. Even with innovative technologies at Microsoft (whether homegrown or acquired), there are too many internal power struggles going on for those innovations to ever really shine through or live up to their full potential. It's really a symptom of the corporate culture that's been allowed to fester for far too long there.

    5. Re:Smart buys by 0100010001010011 · · Score: 2, Interesting

      Apple did more than slap their name on it and sell it. Apple uses it's acquisitions as pieces to complete a puzzle.

      "MultiTouch" was the missing piece to get the iPhone out the door.

      They bought P.A. Semi in 2008, I bet the Apple ARM chip is more than something made in 2008 and stamped with a logo. But it's what was needed to get the iPad out.

      iTunes has moved far beyond what it was originally.

    6. Re:Smart buys by Angst+Badger · · Score: 4, Insightful

      Vista failed to deliver innovation in operating systems, Windows 7 is just Microsoft playing catchup with Apple [...]

      People say this a lot, but is there really that much innovation to be done in the operating system space, at least for end users? (The server space is, of course, quite different.) Personally, I'd be a lot happier if Microsoft stopped "innovating" with Windows, unless the innovation in question is to get the hell out of my face and operate smoothly so I can focus on my applications, which are why I have a computer in the first place. It's 2010, for crying out loud. The personal computer OS is a mature product category, and would be better served -- especially in Microsoft's case -- by fixing its plethora of bugs and security holes and misfeatures and just supporting new hardware as it comes along. While they're at it, maybe they could focus on optimizing its memory and CPU usage so that there's more left over for -- again -- the applications its supposed to support.

      Being as we are, as a group, actually interested in the inner workings of operating systems, it's sometimes hard to remember that operating systems are mainly visible to users to the extent that they don't work as well as they should. A good operating system is unnoticeable for users and highly tractable for developers. Microsoft is failing miserably (and, for misguided marketing purposes, deliberately) at both.

      --
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    7. Re:Smart buys by westlake · · Score: 2, Informative

      Windows 7 is just Microsoft playing catchup with Apple

      OSX 10.6 has 2% of the market. Win 7 8%. [and in daily tracking a tad under 10%] Vista and Win 7 combined have 25% of the market. Top Operating System Share Trend

      Ars Technica posted this interesting chart of Windows usage on Steam:

      19% of Steam users are running 64 bit Windows 7. "There are more users on Windows 7 64-bit than any other flavor of Windows, except for Windows XP 32-bit."

    8. Re:Smart buys by Anonymous Coward · · Score: 2, Funny

      How many days till the heat death of the universe?

    9. Re:Smart buys by Bert64 · · Score: 5, Insightful

      They didn't say playing catchup in marketshare, they mean catchup in features, stability performance and appearance etc..

      People don't buy windows because they've assessed multiple competing options (including osx and linux) and found windows to be technically superior or better value for money, they buy it because they don't realise anything else exists, because they're afraid to learn something new or because theyre forced to by having their data held to ransom by proprietary applications and their formats.

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    10. Re:Smart buys by Taagehornet · · Score: 5, Funny

      Innovation at Microsoft ended long, long ago.

      LINQ

      The list goes on; if you're into language design then Microsoft is definitely the place to be right now. They've managed to gather some absolutely brilliant people.

    11. Re:Smart buys by Mister+Whirly · · Score: 2, Funny

      Wow, the death of Microsoft, predicted on Slashdot? Now there is something we have never heard before...

      Take out the ClearType reference, substitute 2000 and XP for Vista and Windows 7, and you have a meme from 2001.

      --
      "But this one goes to 11!"
    12. Re:Smart buys by T.E.D. · · Score: 2, Informative

      Microsoft has never "innovated" anything in its history, unless you count software licenseing or vendor agreements.

      They even bought DOS from someone else, for crying out loud.

      The best case you could possibly make for them is WindowsNT. They developed that in-house, but they did it by hiring the team that created VMS away from DEC and setting them loose. It wasn't entirely a home-brewed thing.

      This is just a story about Microsoft doing what they've always done for the last 30 years. If you want to find "innovation" at Microsoft, you have to look at their legal and marketing departments.

    13. Re:Smart buys by linux_geek_germany · · Score: 2

      Microsoft's large marketshare compared to Apple's is rather grounded in the critical necessity of certain Windows-only applications for a lot of users instead of the superiority of the OS.

    14. Re:Smart buys by Ngarrang · · Score: 4, Insightful

      People don't buy windows because they've assessed multiple competing options ...

      Depending on the user, the thought of the OS was probably secondary to the intended task: Run a web browser. Think about the typical user. And by typical, I mean grandma, mom, brother, dad, friend down the way that aren't tech geeks like the readers here. They just use a computer to get things done, like driving a car to get to work. They just use it, it is just a tool. This kind of user could care the hell less about the OS wars. They mock people like you and me for even caring about something "so trivial, because they all look the same anyways." (that is a direct quote, and it bugged me) And for many, many people, using a computer means running a web browser to get to FaceBook, MySpace, AOL, Gmail, etc, etc. The OS underneath doesn't matter for many of these people. Oh, sure, some of them want to type up documents, maybe write up a quick spreadsheet to help calculate some costs, but even then, the apps look the same on all platforms.

      The difference comes in the money used to purchase the product. If dad only wants to spend $400 on "something that will let me read e-mail", it is probably going to be a PC with a copies of Windows already included. So, no, there is no comparison shopping be done. There is no point for them.

      Think about the last time you bought a broom. Did you feature compare several models? Hate it or not, but the computer is on the level of a broom to most users. This fact bothers me...a lot. But I have had to come to terms with it.

      --
      Bearded Dragon
    15. Re:Smart buys by UnknowingFool · · Score: 2, Insightful

      Apple bought Fingerworks for multi-touch technology. This technology went into the iPhone and later the trackpads on their laptops and now the iPad.

      --
      Well, there's spam egg sausage and spam, that's not got much spam in it.
    16. Re:Smart buys by pydev · · Score: 3, Interesting

      The three companies are quite different.

      Microsoft invests a ton of money in research and acquiring companies, but it never seems to have much impact on their products.

      Apple invests nothing in research and a lot in acquiring companies, and they are excellent at getting their money's worth by putting the technology into products.

      Google invests a decent amount of money in their own research (but they aren't as blue sky as Microsoft Research), they acquire quite a bit, and they usually end up putting a fair amount of both in-house and acquired technology into products.

  2. It can only be good... by nhytefall · · Score: 3, Insightful

    If a company cannot innovate internally, then they have to acquire from outside.

    Grow or die... but, it has allowed MS to improve their product offerings over time. Should be interesting to see what the future holds.

    --
    0100010001101001011001 0100100000011010010110 1110001000000110000100 1000000110011001101001 0111001001100101
    1. Re:It can only be good... by Captain+Splendid · · Score: 2, Funny

      There can be only one!

      Fixed that for you.

      --
      Linux, you magnificent bastard, I read the fucking manual!
  3. "Become"? by John+Hasler · · Score: 4, Insightful

    > Microsoft has become a clumsy, uncompetitive innovator.

    Microsoft has always been a clumsy, uncompetitive innovator (though I suppose dumpster-diving does require a certain amount of agility).

    --
    Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
  4. Something's amiss... by Petersko · · Score: 2, Interesting

    "CRN takes a look at the past five years of Microsoft's acquisition history, which totals $13 billion and more than 7,000 new employees, and highlights 10 deals and how they've affected the software giant. While some larger acquisitions stand out for better or worse, such as Danger and aQuantive, there are some smaller, blink-and-you'll-miss-it deals that have proved pivotal for Microsoft's push into new areas such as virtualization."

    Sounds like it might be an interesting article. Also looks odd - a slashdot article submission about Microsoft that's, at worse, neutral. Where's the pro-forma jab?

    "And Microsoft's recent acquisition track record may lend credence to the heavy criticism levied against the company by former employees like Dick Brass."

    Ah... there it is.

  5. What a weird list. by barfy · · Score: 2, Interesting

    Bungie, Visio, Great Plains Software?

    These three companies have made more money and been more influential than these companies!

    1. Re:What a weird list. by N3tRunner · · Score: 2, Informative

      Bungie and Visio joined Microsoft in 2000, and Great Plains Software was purchased in 2001, all of which are before the scope of this list.

  6. MicroSoft Going To Innovate.... by thestudio_bob · · Score: 2, Interesting

    "Hi, MicroSoft here and with all this bad press coming out lately, I would like to ensure you that we have some truly revolutionary products coming out soon... blah blah blah."

    Wake me up when they actually produce something cool that I can touch and feel. I'm getting tired of the standard "MicroSoft is going to innovate, just wait and see" PR tagline.

    --
    The real Sig captains the Northwestern. This one captains /.
    1. Re:MicroSoft Going To Innovate.... by miggyb · · Score: 2, Funny

      Oh goodie! I'm already throwing chairs in excitement!

      --
      This signature serves no purpose other than to help you see which posts were made by me.
  7. Danger, Danger! by netsharc · · Score: 4, Informative

    Ah, Danger, the company that all the competent people abandoned, and ended messing up the storage/backup for all of T-Mobile Sidekick users' data?

    How did that go anyway, I heard they managed to find a way to recover most of it?

    --
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  8. Still the best one by far by Monkeedude1212 · · Score: 3, Insightful

    Though not acquired in the past 5 years, Visio is still the best "Microsoft" product. It is the only one I wish I had, as the open source alternatives don't have the bells and whistles that make Visio a great product.

    If you have had to use it - you know exactly what I'm talking about. Its got all the interoperability of Microsoft products that you'd expect, with all the ease of use and understanding that each Office iteration lacks.

    1. Re:Still the best one by far by 99BottlesOfBeerInMyF · · Score: 3, Interesting

      Though not acquired in the past 5 years, Visio is still the best "Microsoft" product. It is the only one I wish I had, as the open source alternatives don't have the bells and whistles that make Visio a great product.

      Visio is certainly usable and I might even grant you nicer than Dia. It is still not as nice as OmniGraffle which (while not OSS) blows Visio out of the water in many ways.

  9. Turf Wars by codepunk · · Score: 2, Interesting

    So how many of you have been in mid sized growing companies that eventually kill off any sort of innovation they had due to Turf Wars? Every mid
    sized company I have ever worked for tend to start the death spiral just about before they hit the 300-400 million mark. Sure the brand carries
    them for a while but all innovation starts dying due to politics and turf wars. Most will start heavy acquisitions at this point to stay ahead but that
    only turns the acquired into mush. It is a interesting phenomena to watch from the sidelines as the business inevitably implodes.

    --


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  10. Flurry of negative Microsoft stories by Renderer+of+Evil · · Score: 5, Interesting

    Is it me, or has the press turned really critical of Microsoft in past couple of months? It sort of feels like the barbarians are at the gate, waiting to taste Balmer's bitter flesh. Yesterday it came to a crescendo with Joe Wilcox publishing a devastating piece on how middle manager culture is destroying innovation at the company.

    I can't really peg this on one single thing, but if I were to guess, it's probably because Apple and Google are mapping out the future while Microsoft is still hung up chasing ghosts of yesteryear with me-too products with little or no tangible value.

    Or perhaps it's just confirmation bias on my part because I don't particularly care for the company or majority of their products.

  11. Sure, but what about CompuGlobalHyperMegaNet? by RevWaldo · · Score: 2, Funny

    After all, Bill Gates didn't get that rich by writing a bunch of checks!

  12. Re:kdawson by 99BottlesOfBeerInMyF · · Score: 2, Insightful

    I've been able to get pro-Microsoft articles posted by kdawson...

    The idea that articles would be pro or con seems insane to me. What ever happened to journalism? It seems like everyone has decided it is more profitable to have rabid, emotionally driven dichotomies to sell "news" rather than just strong, objective, fact-based journalism.

  13. It's not talked about much by Anonymous Coward · · Score: 5, Interesting

    because you usually hear it from the executives and others who are well taken care of...

    But having living through an acquisition by Microsoft of the small company I was working at, I personally found Microsoft's internal culture to be toxic to much of what made our startup successful in the first place. As I saw it, for the typical 'guy in the trenches' your competition soon stops being the other companies competing in your market and becomes your co-workers. The success of your origination is disconnected from the success of its products in the marketplace, while your personal success soon depends almost entirely upon your skills at competing against your peers, as it is predetermined how many winners and losers there will be amongst you.

    1. Re:It's not talked about much by gujo-odori · · Score: 4, Interesting

      Yeah, what he said.

      I also worked at a smallish company that was acquired by Microsoft (funny it wasn't on the list in TFA, it fits the time span of five years, and some of the companies mentioned in TFA were acquired fist). My description of MSFT's internal culture would be "pathological," but I guess "toxic" works, too.

      How pathological? *Every one* was required to go through a full series of Microsoft interviews in order to keep our jobs. Submit your resume, the whole nine yards. Of course, most of my interviewers quite obviously hadn't even bothered to read my resume, leading to some pretty "interesting" questions and some answers along the lines of "I don't know; I don't do that."

      One of them actually admitted point-blank that he hadn't read my resume and said he was too busy to bother with that. Classy, that. I bet he fits in pretty well at MSFT, though. A couple of others also pretty obviously hadn't but didn't 'fess up. So mostly, my "interviews" consisted of explaining to people who hadn't a clue what I did or what my team did what it was we did, since they seemed to have not read our job descriptions either.

      I met a former Danger employee not long ago. Some interesting stories there, too.

  14. Simple adaptation by Weaselmancer · · Score: 3, Insightful

    The reason why Microsoft is more of an acquire company than an innovation company is that the waters it swims in are different these days.

    When MS started out, they had little money and the market was nearly empty. Very little competition. So the best move for MS to make was innovation. Come up with something new and market that. And hope to make it big, which they did. It was a gamble.

    Now, MS is HUGE. And the market is full - loads of competition. They don't have to innovate anymore. They can assimilate small fish that do their innovation for them. They don't have to take the risks a small company would have to take anymore. A startup in this environment would have to gamble hugely to get big. There isn't much room. Patents and other competition means there are very small survival spaces in the ecosystem. That is what MS is hoping to acquire. The "oh wow I didn't think of that" part of the market. They don't have to think like a small "hope we can make it" company anymore. They're here to stay. Now given that, what is the best strategy? Stop anyone else from competing at their scale. Buy them out and make the marketplace ecosystem even smaller.

    The environment has changed, so MS changed to adapt to the new environment. It's not surprising.

    --
    Weaselmancer
    rediculous.
    1. Re:Simple adaptation by gtall · · Score: 4, Interesting

      Innovation in any large company is hard regardless of the market. I don't recall MS innovating much of anything...ever, but then I'm a Mac person.

      Someone above wrote about what it was like to be in a small company taken over by MS. If the corporate culture is to promote a competition amongst the employees instead of competition geared toward competitors, then MS is probably what results. If you have a good idea, your co-workers will screw you because if it succeeds, they do not. That leaves the competition aspect of MS in the hands of Business School Product who understand nothing technical and but who really get "screwing a competitor" as a measure of success. Good ideas rise to the top at MS in spite of their current culture as opposed to because of their current culture.

      Many other companies are in the same boat. HP used to be an innovator before they became PC/printer box makers. They screwed their engineering culture and now attempts to get it back are drowned by the Business School Product running the company. IBM appears somewhat similar although they do seem to have some hardware innovation kept alive, probably an oversight that will get killed off eventually.

      It's a bit hard to tell where Apple's innovation comes from since the company is so secretive. Presumably, they have not neutered their engineering and some ideas are bubbling up from them.

  15. It's because Gates is gone by Jonathan · · Score: 3, Interesting

    It's true that Gates may not have been a real leader of Microsoft since the 1980s, but like Jobs he was the charismatic symbol of his company. The media ate up his "The Road Ahead" stuff just like they fawn over Jobs' keynotes. Ballmer, despite his sometimes amusing antics, is basically a generic CEO of no real consequence or media appeal.

  16. Live by the sword, die by the sword by Shotgun · · Score: 3, Insightful

    Internal competition is common at great companies. It can be wisely encouraged to force ideas to compete. The problem comes when the competition becomes uncontrolled and destructive. At Microsoft, it has created a dysfunctional corporate culture in which the big established groups are allowed to prey upon emerging teams, belittle their efforts, compete unfairly against them for resources, and over time hector them out of existence.

    This sounds like the same thing they do to external competition.

    --
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    Yeah, but it ain't easy. -- Simba
  17. Re:I question his creditability by shutdown+-p+now · · Score: 3, Informative

    The claim that Apple II technique was proper subpixel antialiasing by design is debunked on Wikipedia.

  18. Re:Slide Show warning by miggyb · · Score: 2, Informative

    Entire article in one post:

    Fast Search & Transfer (January 2008)

    While much of Microsoft's recent push into search has been on the consumer side with Bing, Microsoft's $1.2 billion acquisition of Norway-based Fast Search & Transfer has helped the software giant make inroads in the enterprise search market. More than 10,000 of Microsoft's enterprise customers have deployed Fast's technology to date, and Microsoft's free Search Server Express product has been downloaded more than 200,000 times, according to Whittinghill.

    Fast's enterprise search technology will also be part of Office 2010, Whittinghill says. Office 2010 is being offered to selected testers as a Release Candidate, and is slated for launch by June.

    Danger (February 2008)

    At this point in time, a week before the Mobile World Congress event in Barcelona, it's hard to look at Microsoft's $500 million pickup of Danger, developer of the software and services stack for the Sidekick, as anything but a disappointment.

    Much of the Danger talent landed in Microsoft's Premium Mobile Experiences (PMX) team, a group within the Mobile Communications Business (MCB) of the Entertainment and Devices Division. PMX not only was responsible for a Sidekick outage last October that caused T-Mobile subscribers to lose data, it's also leading Microsoft's Pink smartphone project, which has been rumored to be on the rocks for several months. Many former Danger staffers have either been laid off or left Microsoft of their own accord.

    According to Whittinghill, the goal of the Danger acquisition was to combine all the different Microsoft experiences, including MSN, Zune and Windows Live Search For Mobile, and "start creating a connected entertainment and communications experience." Microsoft may still be planning to launch Pink, and it may actually fulfill this vision, but right now, the Danger deal looks like a dud.

    Kidaro (March 2008)

    Microsoft's acquisition of Israel-based Kidaro, reportedly for $100 million, added desktop virtualization to its portfolio and gave the company the all important backward compatibility necessary for upgrading to new versions of Windows.

    Kidaro is now called Microsoft Enterprise Desktop Virtualization (MED-V), which is essentially Windows XP Mode with management capability layered on top. Kidaro's technology allows companies to continue using legacy business apps after Windows upgrades, and it's also well suited to mobile environments with large numbers of notebook PCs, where the ability to deploy and move PC images quickly and easily is an advantage.

    Kidaro is part of Microsoft's Desktop Optimization Pack (MDOP), which includes desktop and application virtualization, inventory services, System Center desktop error monitoring and group policy management tools, and is only available as part of a Software Assurance subscription.

    DATAllegro (September 2008)

    Microsoft deepened its data warehousing portfolio with its September 2008 acquisition of DATAllegro, an Aliso Viejo, Calif.-based firm whose technology allows SQL Server to handle massive amounts of data. "They allow you to scale out to hundreds of terabytes," says Whittinghill.

    The DATAllegro deal, which reportedly cost $275 million, was Microsoft's entry to the data warehousing space. According to Whittinghill, Microsoft was interested both in DATAllegro's talent and its core IP. Given the growing role that data warehousing and business intelligence are playing within the enterprises, and the rapid increase in the amount of data enterprises are generating, this acquisition will continue paying dividends for the next several years.`

    Calista Technologies (January 2008)

    Microsoft's acquisition of Calista brought in a collection of GPU virtualization technologies that stream multimedia (Flash, Silverlight, Windows Media and Direct3D) content from a Hyper-V host to thick and thin clients.

    "Calista provided the essential technology for increasing the ease of experience around watching video and

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  19. Re:Ready Your Fanboys by megamerican · · Score: 2, Insightful

    Translation:

    "Wah, stop bashing my favorite big corporation! The other big corporations are no better, blah blah, whinge, whinge".

    CLUE: intelligent people don't have "favorite" big corporations.

    Where did he profess his love for any corporation? Pointing out that Google gets much of its innovation from others doesn't mean he loves Microsoft or any other large corporation. I guess an intelligent person such as yourself already knew that.

    --
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  20. Re:Slide Show warning by jgtg32a · · Score: 2, Funny

    My plan worked flawlessly

  21. Unintentional monopoly? by plopez · · Score: 2, Insightful

    The author was only there from '97 to '04. There was nothing unintentional about it. If you know their history you know this. Their restrictive licensing began in the '80s. For example, early on they made license deals with manufacturers, e.g. Dell and Gateway. What that came down to was the manufacturer had to pay a fee whether or not a PC shipped with an MS OS. So what did they do? Ship only MS OS on their machines. MS was locking out the competition as as fast as possible.

    This is also the company that said, It's not done until Lotus won't run".

    Ballmer earning profits? He lead MS into their first ever period of losses. Now only remediated by Windows 7. Vista was a train wreck.

    Being a monopoly has done what it always does; t makes a company fat, sloppy, lazy, and unimaginative.

    --
    putting the 'B' in LGBTQ+