Indiana Jones and the Merger of Doom 

 Back to SFR Stories 
I was trying to come up with a clever acronym for the word Merger.
I wanted the acronym to capture the *real* nature of mergers in the software industry today, and not the view of mergers as they are presented to us by the surperfoulous CEO or the barely-still-free trade press.

While I did come up with some good results, there was no way to capture the true nature of mergers using a simple 6-letter acronym. There were a lot of 4-letter words in most of the Merger acronyms, but none that really hit the nail on the head.

But, this past weekend I saw Indiana Jones and the Kingdom of the Crystal Skull. As I was explaining to my 6-year-old about Indiana Jones films of the past, it dawned on me that the films were a perfect fit for a Merger metaphor.

I'll get back to the Indiana Jones reference in a moment.

My recent obsession with mergers came up last week when I heard that a past employer of mine was acquired by a company called Versata.

"These stones had powers which were revered and protected by the people of a small village, and they were stolen by someone."

The only reason this was so pointed was that this past employer was one of the three I have had in 25 years which I truly loved. I worked at the company for 3 years, and they knew how to treat employees very well. Many of the employees had been with the company at least 10 years and some were there for the entire 15 years of the companies' history.

So, when I heard about the merger I contacted some of the employees to see how things were going. The info I received though, was less-than-stellar. In fact it seems that Versata bought this company and effectively 'let go' all but a few of the employees.

Now, losing your job is a major hit to your confidence as well as your income. I do understand that M&A activity will result in some job loss though, and while it sucks, it is a part of the plan. But if one looks a little deeper into this merger we see the ominous signs that something bad is afoot, and that the people at Versata will not be the ones to suffer.

I have been in the chair for three mergers. In all three cases, I worked for the company being merged-upon. In two mergers they kept me on, and in one merger they let me go and then hounded me for 3 months to come back and fix the trainwreck they caused.

I now have a staunch 'no merger' policy - you merge on someone, or on me and I am gone.

What is unique about the little company I used to work for is that all the employees really liked their jobs. All but 2 employees had ever been through a merger, and none of them wanted to leave. Yet, I know about 35 people that are looking for work right now, and the jobs available when compared to life at that past employer of mine is not very attractive.

The obvious here is that the employees will have to suffer, but again while I do not like it, it does happen all the time. What is not obvious here is what happens after the merger is complete - what will happen to my past employer when they are absorbed into Versata?

Since there are less than 7 employees left, the major intellictual property of the company and its products is gone. Try as it may, I believe that Versata cannot sell or service the existing customers without those people they laid off. And therein lies the truth about what really happens when there is a merger in the software industry - valuable people lose their jobs, the existing customers will suffer badly, and the product will languish with minimal future direction or ability to add new value to its users.


Page: NEXT>>