Why Mergers Happen in IT

Prices can be set according to the benefits a seller thinks they provide, or they can be set to optimize profitability. At least option two is market driven, but that often leads to nothing but a pricing war. So if vendors want to avoid commoditization, they can either differentiate their product in a way that gets through to customers or they can reduce their customer's choices. Everyone knows that monopolies can charge whatever they want. That is why we dislike them and why even Adam Smith's invisible hand needs to be smacked on the knuckles like an ornery nun's ruler from time to time - a smack we call antitrust.

Sometimes mergers are good. They can allow a company with a broader reach to deliver innovative services previously only delivered by a more nimble upstart. They can also coalesce standards and mature products in a world previously chaotic from over-choice. This is usually early in a product life-cycle, however. Once a market matures and products are at risk of becoming commodities, mergers become the defensive maneuver to protect market share and profitability rather than a way to deliver better products and services.

This is where it can get tricky for IT managers. The easiest time to simplify to a preferred vendor is when the market is mature. This is also the ripest time for a "mad merger" to happen; the kind that happens simply to reduce choice. This mad merger can be especially bad if your vendor is acquired by another company with no previous relationship with you. Your best option may be to continue your efforts to simplify along the routes of preferred vendors, but keeping a 4th and 10 playbook in your back pocket just in case this mad merger ever happens. Consider things like 3rd party support for for your environment which will give you time to prepare your next move. You may also consider a backup vendor you can go with. This may sound unimaginable, but it is far easier to migrate a simple well oiled environment if you want to than to manage a kludgy patchwork of interconnected chaos because you have to. So in a nutshell, be mindful of the mergers and have a plan just in case, but do not stop simplifying!