In the modern world of business, manufacturers and solutions providers in AV and IT (as well as other realms of business) look for the advantage and leverage to give themselves that boost that is so important in this highly competitive technological environment.
Primary examples
Let’s take a look at recent noteworthy acquisitions. Back in March, Facebook purchased Oculus VR for a staggering 2 billion dollars. As Facebook CEO Mark Zuckerberg explained, “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.” A week prior to the Oculus acquisition, Sony unveiled a virtual reality headset developed for PlayStation 4 with 1080p resolution and a 90 degree field of view. Sony’s foray into virtual reality: Project Morpheus, a wraparound headset designed to work with the company’s PlayStation 4 games console. The headset’s introduction came in tandem with Facebook’s high-stakes maneuver to put virtual reality on the map for non-gamers per its recent acquisition of Oculus Rift. No current timeframe as of yet for release of Project Morpheus, however claims are for 2015. Here is a good article which published recently, “Oculus Rift vs. Project Morpheus – which is best?” Here is a caption from the article:
Details of what Facebook, having previously focused its attention on mobile and desktop apps, is planning to do with Oculus remains shrouded in mystery. Sony has been clearer in its intentions to harness the powers of virtual reality – in plunging players into a new sensory dimension of gaming.
Back in January, an acquisition that had a perceived profound effect on the AV industry, Google purchased Nest for an even more staggering 3.2 billion dollars to delve into the home automation space. Google CEO Larry Page made the following statement upon sealing the deal, “Nest’s founders, Tony Fadell and Matt Rogers, have built a tremendous team that we are excited to welcome into the Google family. They’re already delivering amazing products you can buy right now–thermostats that save energy and smoke/CO alarms that can help keep your family safe. We are excited to bring great experiences to more homes in more countries and fulfill their dreams!” On the opposite end is a company called INSTEON, a manufacturer of what they term: the most reliable and best-selling wireless home-control networking technology. Further claims include: INSTEON offers more scalability and flexibility than any other home management system on the market. INSTEON is the only technology that simultaneously utilizes both wireless RF and the powerlines (electrical wires) in a building. INSTEON also goes as far as to provide a comparison chart on its website which includes, among others, Nest.
An interesting analogy
Here is a great blog from back in January of this year from Josh Srago titled “Silicon Valley is Taking After Old Record Companies” and this statement delivers an excellent other side of the coin perspective:
This practice of signing a band to a possible multi-record deal, investing the money to help them record an album, and then shelving the masters with no plan to ever release the music became one of the worst kept secrets in the music industry. It wasn’t so much that the label wanted to help this band succeed, they just wanted to make sure that either a similar band already on the label didn’t have competition for sales, or to prevent a competitive label from acquiring the talent to add to their bottom line. With Google’s purchase of Nest (still “technically” pending but likely to go through), I can’t help but think about this comparison.
Which leads me to this. Just last week, an announcement was made that Cisco had acquired a cloud collaboration startup named Assemblage, a company that provides a browser-to-browser cloud-based collaboration platform, for an undisclosed sum (hmm). Cisco put out a short statement as well. It was announced almost a month and a half ago that Cisco had acquired Jive, an enterprise social networking platform with its widely-used WebEx (Web conferencing) and Jabber (corporate IM and IP voice/video) tools. It was Cisco’s second cloud-focused acquisition as they had previously purchased Collaborate.com back in January, a provider that enables teams to set up workspaces for document sharing, task management, and communications; accessible from desktop and mobile devices At this point, they have three new acquisitions in their new UC arsenal. Just how much was poured in all into these acquisitions? Let’s just consider that (somewhat) irrelevant here. Or maybe not.
With all of this being said, has Cisco bought its way into the cloud UCC space, built on three third party solutions? This third party technology add-in methodology seems be commonplace practice these days where major companies, as already notated here, seem to be buying their way into advancement. Is Cisco showing financial muscle over innovation here? Kind of like the Yankees who would essentially put major money into high dollar player acquisitions and much less into building up the farm system. The result – as the major cog players began to get old and even retire there was almost nothing to reach down to the minors for. If these third party acquisitions do not prove to be as strategic as originally assessed for any of these major figurehead companies, could this spell trouble for major market players? Somewha doubtful since for example Cisco is more of an IT cash cow, as it is well known, however the analogy here is still somewhat valid in certain respects. Buy and buy and it becomes a symptomatic practice. And just what does this potentially rob? Innovation.
However in line with Josh’s blog, were some or all of these moves done to build their company’s extended capabilities by advancing through acquisition, or was it a master plan to keep these companies away from the competition? To compare to the Yankees again, the team was famous for doing just this for years under George Steinbrenner. To go along with their grand money spending to acquire superstars (anyone remember A-Rod?), every year they seemed to make cunning moves during, at and after the trade deadline to acquire certain players they may not have necessarily need just to keep them away from other teams. Now this essentially becomes fodder for deeper conversation, although I now see the main point as being in terms of perception lacking definitive reasoning as we all speculate when one of these companies, along with others build out their technology environments through this newly minted acquisition model.
Microsoft was one such company under previous (disaster) CEO Steve Ballmer in which just after he took over, acquisition over innovation started to become the norm along with giant mistakes like Windows Vista, Bing and more recently, the Surface (first model). Their stock began to plummet and essentially Microsoft started becoming an afterthought market player. After Satya Nadella took over months back, in short, the Ballmer years were quickly erased as Nadella created the cloud first mobile first mantra. And earlier this week, the man considered a gentle leader, laid down the hammer and delivered the new rules for forward movement into the future of Microsoft innovation and growth. Lesson here – disastrous solutions (which hardly resemble innovation) and financially challenged acquisitions can lead to potential downfall. Microsoft, an industry IT giant being dragged down by poor concept and wrong moves? Apparently. A lesson learned? Certainly looks that way since I firmly believe Satya Nadella, Bill Gates hand picked successor to Ballmer, began his plan from the next day… on.
Innovation as applies to definitive reasoning
Now if we remain in the video conferencing/UCC environment (which we will), the true innovators are setting the trend for enterprise communication and collaboration strategy. Why exactly does innovation trump the acquisition model in this realm? If we dissect this premise and take more of a more granular approach, we see certain companies building on their own solutions and upgrading to satisfy the current needs of the enterprise be it in hardware, cloud and/or virtualization.
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