Managing Software: What happens when your
software vendor sells out?
Vendor buyouts give you an opportunity to re-evaluate your business systems.
Magazine Issue Date: 09/01/2003
Bill Friend & Olin Thompson, Contributing Editors
THE “URGE TO MERGE” GAME BEING played by the major software vendors is
far from over. Marcam sold out to Invensys. Microsoft bought Navision and Great
Plains. Invensys bought Baan and later sold Baan to SSA.
SCT spun off its process business as Agilisys to an investment group. SSA
bought Infinium. Peoplesoft tried to buy JD Edwards and then Oracle tried to buy
Peoplesoft. We are certain this is not over. What’s going on?
It is a sign of a mature market. Today there are a few software vendors who think
that they can make more money by acquiring competitors or that they can stop
their competitors’ growth by making preemptive announcements about buying
other companies. There is no question that the software vendor community is in
turmoil and in some boardrooms; IT and executive management will be secondguessed about their Y2K and post-Y2K software solution selections. If your
software vendor gets gobbled up in the current feeding frenzy, what are your
options?
First, figure out why your old vendor was purchased. Read their press releases.
It’s interesting that in the hostile takeover move, Oracle said that they would stop
selling Peoplesoft. That’s a pretty good sign of how the deal will go down for
existing clients. Look at how complete the functionality of your current
implementation is for your business. If you have most of the things you need,
then report to your boss that there probably will be “no problem.” More likely,
your implementation is a work in progress. In this case, read the press releases
very carefully and start a dialogue with other users to develop a common front. If
the functionality is not there and you had reasonable expectations that the old
vendor would meet your needs, you will need to extract promises and guarantees
with the new vendor early on.
Second, make an effort to get to know your new vendor. It’s likely that you won’t
be as important to the larger new vendor as you were to the smaller company
you selected. Don’t let that slow you down. Call your new sales rep and ask for a
meeting. Listen to the pitch. What is being offered beyond collecting your
maintenance fees? Find out how wired he is into the new company. If you are
offered headquarters visits to meet with the new management, do it. If they offer
a “bait and switch” to a new software suite, be wary. Evaluate all alternatives
before taking the first offer.
Copyright 2003, Food Engineering Magazine
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Third, although someone buying your vendor
justifies concern, remember that software does not
stop working because your vendor has problems.
Switching to different software is expensive in terms
of money, time and disruption. ASK was a major
vendor in the ‘80s and was gobbled up in the early
‘90s, but thousands of companies still run their
business with ASK’s MANMAN product.
Finally, this is a good time to re-evaluate your
software strategy. Think about all that IBM
mainframe and Digital software that was used 15 to
20 years ago. Most of that software is either not
being developed further or the vendors are out of
business. In software as in life, sometimes we have to play the hand we are
dealt. If you find that your current software implementation will be in jeopardy
because a new vendor won’t be supporting your software, consider moving on.
There are probably a few good reasons for disappointment with your current
implementation. Use a vendor buyout as an opportunity to re-evaluate your
business systems and learn from your previous information technology
strategies.
About the Authors:
Bill Friend and Olin Thompson are consultants who
specialize in the application of information
technology in the food industry. They are cofounders of The Food CIO Forum
(www.foodcioforum.com).
Bill can be reached at bill@foodcioforum.com and
Olin can be reached at olin@foodcioforum.com.
Copyright 2003, Food Engineering Magazine
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