Preparing for an uncertain future means making sure you can integrate new software and services into your existing enterprise architecture. "You need a system designed strategically to handle vendor and product turnover," says Lewis. "It's not easy, and it requires some investment." Technology-dependent financial services companies, he says, sometimes write their own abstraction layers so they are independent from products underneath. "With integration middleware, you can, to some degree, make changes without causing massive ripples across the system. The degree to which you can achieve modularity makes change easier."
For all the fear and doubt caused by vendor consolidation, changes in the industry can also represent an opportunity. At Russ Berrie, Alan Heger watched as PeopleSoft let go of many of J.D. Edwards' most talented people after it bought the company. His reaction was to swoop in and hire them himself. "We found good people, developers and consultants, who we were able to bring on board, which made us much more self-sufficient," he says. That self-sufficiency may be of ongoing value if Oracle wins ownership but doesn't win over Heger.
"Harvard Business Review on Mergers & Acquisitions"
By Dennis Carey, et al Harvard Business School Press, 2001
"Enterprise Applications Market Consolidations to Create Software Custodians"
By Albert Pang IDC, 2004
There are big-picture opportunities for customers, too. One way to look at consolidation is as a chance to focus on the next generation of software and services, says Doane. "While the whole world is distracted by Oracle and PeopleSoft, companies such as Salesforce.com are coming up fast," he says. "When the dust settles from this deal, everyone's going to see that the stuff in question is prehistoric." Salesforce.com offers hosted software for customer relationship management as a service, a model that, so far, has mostly been marketed to smaller companies. But Doane says such services are maturing rapidly. "If you can wait a while, even if you are a really big user, service- oriented architecture could be your next move," he says.
Guardian's Callahan wants that day to come soon. "I'm beating the drum on utility computing, on-demand computing, and pushing software companies to change to a pay-by-the-drink model that lets users scale up and down as needed, even for software we might manage in-house," he says. "IT has grown up, and the days of gigantic, gee-whiz spending are gone. Every change in the marketplace is a reminder that things are different now."
And sometimes the benefit comes from the merger itself, which is where the acquiring companies tend to focus their marketing efforts. Customers make what they will of those pitches. "If the small fish gets eaten by the big fish, you can probably end up with more resources and support in the long run," says Silvera of Vail Resorts. "But I'm not sure the customer community sees Oracle in the same way."
This article was originally published on 12-01-2004
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