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Customers Question Tech Industry's Takeover Spree
crimeandpunishment writes:
"When it comes to the world's largest technology companies, is bigger better? Maybe for the companies, but maybe not for their customers. Tech companies, which have spent $350 billion buying other companies over the past few years, have marketed their acquisitions as beneficial for their customers, offering them a broader range of products, and making it easier for one-stop shopping. But changes in customer service may be offsetting any benefit. In the words of the chief information officer for a large association, 'When the smaller guys are gobbled up by bigger guys, in theory it's supposed to be better, but in our experience it's been worse.'"
When has anything a company has done been for your benefit?
If I were God, wouldn't I protect my churches from acts of me?
If people really want this free-market capitalist monstrosity, then they need to accept the fact that what is best for the *company* always comes first. It really irritates me every time I hear people complaining that a corporation is not thinking of its customers first, or its employees... That is not a corporations job. They're one and only job is to make money for their shareholders.
If you don't like this--as you shouldn't--then the system itself is what needs to be changed. Don't blame the individual companies--they are doing exactly what we have set them up to do. Capitalism itself is the enemy.
Takeovers are about reducing competition and increasing market share so the don't need to compete. One serious flaw in capitalism is that companies don't want to compete because it's difficult and generally not very profitable.
If you didn't come to party don't bother knocking on my door. Prince '1999'
This past week I had two very interesting customer service experiences -- interesting because of just how different they were.
I spent probably 5 to 7 hours on the phone with HP technical support last week, trying to get them to assist me with a problem we were having with a pair of ProLiant servers. I was shuffled around to multiple departments (and, judging by the various accents, I would say I was probably shuffled to multiple continents as well), each one telling me that the next guy was the right guy to talk to about our issue (which of course he wasn't). This was for a fairly simple question about the functionality of one of their server administration tools, that no one seemed equipped to answer.
Conversely, we also had a hard disk in a ProLiant server go bad. With the serial and part numbers in hand, I was able to get a replacement shipped within 10 minutes.
The two completely different experiences I had suggests to me that when companies get large, they get very good at handling the common support problems, like bad hard disks. They develop procedures that save both the company and the customer lots of time, and are relatively painless. But what's lost is the ability to handle the out-of-the-ordinary service needs that customers have; the company is just too big, and the support guy (let's be frank, in some call center in India*) just doesn't have the resources or the knowledge to handle the problem. This leads to a frustrating experience -- whereas in a small company, these things tend to be handled quickly, because the support guy can escalate easily.
*HP doesn't even try to hide that their support is outsourced to India. If you log-on to their professional support, you can tell right away by the names.
Nemilar http://www.techthrob.com - Visit Me!
Not so much the size as the MO of large IT companies. Create a shell of sales, marketing and consulting while all development, maintenance and support is hollowed out and internally "outsourced" to units in very cheap countries. Even though the quality of all three go down they manage to win bids by in theory offering the same as their competitors for less. In practice it turns out much worse than expect, but that's quickly forgotten during the next round of contracts again with a tight budget.
Live today, because you never know what tomorrow brings
A small company that has a few clients is more likely to provide very good support, as opposed to a large company with many clients. While large companies support large companies well, due to their capacity to effect change at scale, this is not the case of large companies supporting smaller companies. Typically, while say an account manager at a small company might do several things to streamline the benefits that their client(s) see, this may not be the case with larger companies which rely on various processes to get things through the pipe and ultimately down the line to their clients. Everything at scale will fail. One only has to look at government to see that being everything to everyone will ultimately not work. If you require 10 people to sign-off on a PO as opposed to 1 person then it's clear which PO gets completed first. Friction is the enemy of performance and the friend of low tolerance.
Something like half of all mergers/acquisitions fail to generate the returns expected. In such cases, it's usually the shareholders of the company being bought that reap the benefit (assuming they can dump whatever stock of the acquiring company they receive as part of their payment).
Think about it. It's basically a coin flip that company A buying company B will result in any benefit to the shareholders of A. If shareholders were truly wise, they'd tell management to just give them the cash they would have spent on acquiring a company. They'd make out better in the long run.
-- Fugacity: Confusing chemists since 1908
It wasn't until the late 80's IIRC, that the first software company takeover occurred: PR1ME Computer and MAI Basic4.
Up until then, software companies lived (and died) on their own. Though there was an awareness of takeovers in other industries, there was a pervasive sense that it would never happen in high tech. (At least at the companies I worked at.)
Then MAI Basic4 proposed a hostile takeover of the MUCH larger PR1ME Computer (where I was working at the time.). PR1ME took on a huge amount of debt to raise funds to buy out Bennet S. Lebow (sp?). Then followed several rounds of cost-cutting and layoffs.
I've survived several others since then. In every single case it had NO BENEFIT to the customer that I could see; it was ALL about corporate profits.
Yes, I know anecdote is not the singular of data, but thought I'd toss my first-hand experience into the discussion. (BTW this occurred not very long after Robert Morris unleashed the first internet worm; I was at PR1ME when that hit, too.)
Why can't we use people in prison for low level cheap phone centers?
Because cruel and unusual punishment is unconstitutional...
While I am somewhat skeptical of a lot of the take-over-artistry that goes on, regardless of industry sector(there seem to be a number of places where, under the right circumstances, you can make substantial money by causing even more destruction that gets externalized in various clever legal-but-slimy ways. Any circumstances that encourage the best and brightest in finance to act as, in essence, high class smash-and-grab thieves is pathological any way you slice it.) I find the tech takeovers introduce an extra complication:
Software maintenance and development is Hard. Much ink has been spilled on the Best Practices of doing it; but a lot of firms are still just barely hanging on. Any disruption to their development process or roadmap can set them back months or years. Since, in many cases, the point of doing a tech acquisition is to offer a "total package" or a "solution" or a "suite" this means that, in addition to all the institutional and job-loss shakeups, you suddenly have two or more development teams, each bringing its own nasty legacy baggage to the party, trying to mash their products into some sort of "integrated solution".
At best, this is an evolutionary process. Over a period of time, they manage to evolve the products toward one another and eventually end up with something nice and coherent and refactored so forth. More commonly, major differences and glaring integration issues persist longer than the customer would like, and niggling little oddities persist for years. Sometimes, some mental giant decides to solve the hard problem of legacy by throwing one of the products away(generally the one that isn't his baby) and re-writing it from scratch in the idioms of the other product. Hello major feature and stability regressions...
We use Altiris some at work, and they were recently aquired by Symantec *scary background music plays* who has embarked on the "rewrite virtually from scratch" path. They have some sort of pie-in-the-sky vision of a "Symantec Total Endpoint Management Solution"; but, until they get that working, their support for the last pre-takeover version has gone to shit and the N+1 version has massive feature regressions, including stuff we use all the time, all over the place, and is thus unusable to us. Unless they get their act together fast, we may be forced to bail entirely. Win7 finally has something resembling adequate first-party imaging and deployment features, and there are other tools, including some OSS, for system inventory and remote control....