Application Rewrites after Acquisitions: How Large Software Companies Destroy Startup Value

Reading Application Rewrites after Acquisitions: How Large Software Companies Destroy Startup Value made me think of a decade or two ago how Computer Associates were famous for the same thing.  Then later it was Symantec.    One comment I read somewhere, somewhen went along the lines of “As soon as you read that XYZ, big software conglomerate, purchased a product you had a year or two to find an equivalent product by a smaller software organization. “

I feel the reason is even simpler.  The best folks in the small acquired software company, from management to developers to testers and others, start leaving due to the clash of corporate culture and ossification of the new corp culture.  

Actually that applies to all acquired corps.   Not just software corps.  

I saw the same thing with a client from the 80s who was a heating, ventilation and air conditioning (HVAC) wholesaler and was acquired by a company which, once you traced through the corp ownership, was on the world wide Fortune 10 list.  For the while after acquisition by they weren’t too bad but the senior managers at the former head office in Vancouver started leaving as did the branch managers.   As did all the employees at the former head office.  After five years there was only two employees left in the head office from when they were acquired.  I recall visiting that employee in the office.  The difference in moral and attitude was striking. 

Then the head office in Toronto, who was running a very different business, decided to convert the sales order, accounts receivable, and accounting app onto their older, slower and much more cumbersome system.  Which had much reduced functionality compared to the HVAC’s system.   Thus folks had to go back to manual systems in some cases.

Mind you, presumably the acquired corps owners made a healthy profit.   And I don’t blame the owners of the HVAC company either.  The owners were two brothers who wanted to get their money out of the business before they died so they could enjoy retirement.  They tried employee ownership but there wasn’t enough interest or funds available to buy out the brothers.

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