Wouldn't it be great to know how Oracle or IBM handle integration after a merger and acquisition? I've heard Oracle's got it down to a list. I'd love to get a peek at that.
On the other hand, if you're curious about what NOT to do, check out Microsoft's handling of post-acquisition integration. It's not a pretty track record, as Steven D. Jones of the Dow Jones Newswire points out in an article about Microsoft's recent purchase of Skype. Writes Jones:
Microsoft Corp.'s future with Skype SA will depend largely on whether the software giant can overcome its past. Microsoft, which agreed to pay $8.5 billion to buy Skype, will need a new approach to integrating acquisitions if it wants its investment in the Internet telephony giant to pay off.
Not all of Microsoft's acquisitions have failed, of course, but most of the nearly 20 acquisitions made in the last 10 years have not fared well, Jones states. One analyst he spoke with points out Microsoft often shoots itself in the foot by rewriting acquired software into its own style while the industry moves on.
The article doesn't provide any specifics about how Microsoft handles integration, either on an organizational level or a technology level. But it's kinda hard to argue with the results:
Evidence of Microsoft's integration style is easy to find. Over the past 10 years, the company's revenue and net income have more than doubled and its net profit margin has risen above 30% from the mid-20% range. The problem: Almost all of those gains were driven by the Windows operating system and Office applications suite, businesses Microsoft built.
Microsoft will retain the company as a separate division, which experts say is one positive sign Redmond is trying a different M&A integration strategy with Skype.
There's a slew of theories out there about why Microsoft wanted Skype: It wants to beat Google, it wants to beat Apple via video chat for the tablet and one article even claimed the buyout was motivated by "corporate desperation."
Whatever the reason, the success or failure of this acquisition will rest on integration. And there are plenty of options for where to integrate Skype:
In short, with the right integration, this deal could be brilliant and actually become a strategic advantage for Microsoft's products. Or, it could send Skype's 8.8 million paying users - myself included - stampeding to Google Voice.