Acquisition Motivation and Customer Interests

At OSBC this year a panel discussion was added to the agenda called “Can Open Source Communities Survive Mergers / Acquisitions?” The panel was moderated by Robin Vasan, and included representatives from MySQL, Zend, SleepyCat, and Jboss. This was one of the best talks I was able to attend.

Zack Urlocker of MySQL (now Sun Microsystems) said something that resonated with me. He said when they [MySQL] were acquired by Sun it was because they saw Sun as an environment where they could grow MySQL at an accelerated pace. MySQL wasn’t simply working towards an “exit." They were/are building a big, customer focused software company and this exit was the next logical step.

I really appreciated this concept. I don’t care for the idea of companies who like the beef industry, which, raises cattle for the harvest (slaughter); build businesses just to be sold. The motivation in my opinion is wrong. I understand the pure business justification. This course of action makes perfect sense for the entrepreneur but I question the value and effect it has on the customer.

Customers want the focus on their interests. When it comes to companies investing in software; they want to know that the company is A: focused on the product and it’s ability to meet customer needs, and B: the company is going to be around for a good long while. An open source company building itself simply to be bought; that is, a company which has the primary objective of reaching an exit is in my opinion at serious risk of accomplishing neither because the motivation directs the focus elsewhere.

Acquisition may be the right move but I think the motive behind getting to that point is of great importance. In general I think exits aught to be thought of as new beginnings on sronger footing. When exits are simply exits, it is a red flag for the customer. Customers, Customers, Customers – this is what matters.