Yesterday I saw a Wall Street Journal article that lists the tech companies that acquired the most VC-backed companies since 2000 (Cisco led with 48, and IBM finished second with 35). The story got me wondering about all the tech purchases made over nine years, startups or otherwise, and which one had the greatest impact on the buyer and the tech markets as a whole?
My pick is EMC/VMware, because of the sheer impact that server virtualization is having on the technology industry. And as VMware currently owns this market, it gets credit for much of this impact.
Server virtualization upends IT on multiple fronts. Within the enterprise, it makes IT more flexible because VMs can be spun up in a blink and shifted among physical servers with ease. But there's a price for that flexibility in the form of new operations, security and compliance challenges. And those challenges are spawning a sub-industry of virtualization management and security products and vendors. The hypervisor is displacing the OS as the software axis for IT management and security, and becomes the development focus for new applications and technologies.
Outside the enterprise, virtualization underpins public and private cloud computing infrastructure, which itself threatens to upend how businesses consume and manage computing resources.
As for EMC, the company gained a relevance and market power it would never have commanded as a plain old storage vendor. On the flip side, Microsoft, IBM, Oracle and others have the knives out for EMC/VMware like never before.
I also put this question to my colleagues at Network Computing and InformationWeek, and they suggested a few choices of their own. Because this is my blog, I'm calling their suggestions the runners-up.
Oracle and PeopleSoft: The acquisition gave Oracle a big chunk of the HR software business and solidified its own back-office portfolio. It also meant PeopleSoft customers saw their license costs go up, but this post isn't about what was best for customers. The move also created an opportunity for PeopleSoft leaders Dave Duffield and Aneel Bhusri to launch Workday, a SaaS-based competitor. Maybe Oracle will be back to snap them up, too.
Juniper and NetScreen: This purchase made Juniper an instant threat to Cisco outside of routing and switching. In addition, NetScreen had already purchased SSL VPN vendor Neoteris and IDS vendor OneSource, giving Juniper a three-for-one deal and a nice little security/network-access stack to build out.
Cisco, IronPort and Webex: Tandem purchases positioned Cisco to move into its new role as a SaaS e-mail provider. I think it's significant because Cisco's DNA is building hardware, not running a service. This isn't to say they can't do it, but it's a radical change from the company's proven skill sets. It also tells me that Cisco's crystal ball sees SaaS e-mail (as well as unified communications and collaboration services) as a business with enough growth to justify the capital expenses that come with building out a service and the inevitable mistakes it will make as it learns to be a provider.
I'd love to get your input: which company made the best purchase in the past nine years, and why? Hit the comments box and let me know.