Some weeks, your intrepid columnist stares at the computer screen, trying to muster strong opinions about weak news. Other weeks, he is overwhelmed by the opportunities that present themselves – a veritable smorgasbord of developments is laid, tantalizing, on the table before him. This week, the feast.
All marriages are happy. It’s the living together afterward that causes all the trouble.Raymond Hull
Dear Vorticians,
Some weeks, your intrepid columnist stares at the computer screen, trying to muster strong opinions about weak news. Other weeks, he is overwhelmed by the opportunities that present themselves – a veritable smorgasbord of developments is laid, tantalizing, on the table before him.
This week, the feast.
For example, I was tempted by the many and varied thoughts you generously shared with me after last week’s column on the nightmare of software patching. Surprisingly, there was a deep divide among you on just how culpable the major software vendors are in this mess. But… I think we’ll put this treat in a Zip-Loc bag and sample it a bit later.
Alternatively, I could dig into this week’s Federal Communications Commission ruling allowing the incumbent phone companies to ratchet up wholesale costs for competitive carriers. As we’ve come to expect with any FCC ruling, everyone’s unhappy. The Bell rivals say the decision heralds the death of competition. The Bells – surprise! – say that it doesn’t go far enough. Expect another legal challenge and expect us to come back to this issue.
(By way of an aside, if readers of Network World split in their views of our coverage, I take that as a positive sign. For example, if half the readers say we’re too hard on Cisco and the other half accuse us of being shills for the network giant, I figure we’re doing a pretty fair job of being objective. However, the split view of the FCC’s decision should in no way be interpreted as a sign that the agency has done the right thing.)
No, this week I want to focus on the amazing and rapid increase in mergers and acquisitions in the tech business. Generally, spring is the time for marriages, but this winter is seeing a rush to the altar that would make even the editors at Bride’s magazine blush.
There’s the well-publicized culmination of the Oracle/PeopleSoft drama. Oracle pined after PeopleSoft longer than Elly Mae Clampett lusted after movie star Dash Riprock, and Larry “This is My Final Offer” Ellison has finally captured the object of his affection.
Then we have the $36 billion merger of Sprint and Nextel, which to my mind is a very appropriate pairing of strengths and constituencies. Nextel’s push-to-talk capability is one of the coolest things developed – particularly if you define cool as a feature that real, working people use in the real world. Rumors have Verizon waiting in the wings trying to decide whether to disrupt this marriage and make off with Sprint for itself.
Those two deals were the big news – along with the departure of Pedro Martinez from my beloved Red Sox. (Good luck, Mets. You’ll love him and hate him.) But were you aware that these other deals took place this week?:
* Security software giant Symantec – no stranger to acquisitions – pulled off quite a coup in grabbing Veritas for over $13 billion. With the deal, Symantec gets some very interesting data center and storage technologies that expand Symantec’s reach in the enterprise.
* 3Com expanded its own security offerings by spending nearly half a billion to buy TippingPoint technologies, which offers intrusion prevention systems. Infrastructure players talk a lot about making the network itself more resilient to security attacks and 3Com is putting its money where its mouth is.
* Avaya grabbed up route optimization vendor RouteScience Technologies, for a sum that wasn’t disclosed.
All told, the M/A activity this year has ratcheted up dramatically over last year – by some 30% according to one group that tracks this type of thing. Some say that’s because tech companies have more valuable stock these days and they’re wielding the power that affords them. Partly true.
Other pundits opine that these deals are illustrative of the maturation of the technology industry. There’s a grain of truth in that assessment as well, at least as it relates to certain facets of the industry.
But there’s a bigger and more important factor at work here. With the possible exception of Sprint and Nextel, these companies are positioning themselves to capitalize on the next phase of growth in enterprise IT.
We Vorticians have discussed the wave of change that’s ahead in enterprise IT.
Geoffrey Moore and I focused our entire VORTEX 2004 conference on the next era of enterprise IT – an era that will be marked by a more dynamic, flexible infrastructure and new applications built on the services-oriented architecture.
This is not some distant vision of a bright, shiny new time to come. This is reality today. Customers are laser-focused on reducing the costs of their IT infrastructure by virtualizing the network/compute/storage platform and making it more resilient and secure. They’re building the next generation of applications based on Web services. They need more help from their strategic vendors and the smart vendors are doing everything they can to meet the need – including filling holes in their product portfolios through acquisitions.
At an analysts’ briefing last week, Cisco talked at length about the changes ahead in the data center and how, in its vision, the network will provide many of the services required to virtualize computing and storage. You can expect Chambers and company to make whatever deals they need to make that vision a reality.
What’s the upshot? Stay tuned. The Marriage Channel will be on the air 24-7. More and more IT vendors will be reaching beyond their traditional markets to grab technologies and services that shore up their offerings for the new enterprise IT It will be a fascinating time of change and industry restructuring.
As always, I welcome your thoughts on this issue and any other. You can reach me at mailto:jgallant@vortex.net.
Bye for now.
