Synergy doesn’t work in the software biz either

In the 1960s and ’70s, big businesses got bigger by becoming conglomerates (GE, Litton, ITT, to name a few) only to find they had to be unwound in the ’80s because there was no benefit to wrap so many products together. Entertainment companies took a swig of this juice in the ’80s and ’90s (Sony, Seagrams). For the most part, the software industry has avoided this mistake (Borland, trying to compete with Microsoft, didn’t and Microsoft has become a conglomerate through internal growth and acquisitions) but Merant made it. Starting life as three separate companies making essentially unrelated products (PVCS version control, Micro Focus COBOL, and DataDirect ODBC drivers), the merged group, which is headquartered around the corner from my house, never made any real headway even though each of their product lines itself is a good one. Now, they’re unwinding, acknowledging that enterprise customers aren’t shopping at a supermarket; what was PVCS (plus a product acquired from the departed NetObjects) is the only major line remaining, now that Golden Gate Capital Ventures bought the DataDirect and Micro Focus groups.