This week, there were two significant acquisitions in the tech industry, and the differences between them could not be more extreme. Both involved the acquisition of a high-flying (or once high-flying) company by a larger company. The first was CA's acquisition of Cassatt, a once-hot cloud startup led by Bill Coleman, the "B" in BEA Systems on Tuesday. The second was Intel's acquisition of Wind River Systems, the embedded operating system supplier on Thursday.
In the case of BEA, CA was basically acquiring the assets for an undisclosed amount, but given that Coleman stated the company was "close to the end," back in April, the price couldn't have been very high. Coleman admitted he had been trying to sell the company for several months without much luck as rumors of bankruptcy swirled. In contrast, Windriver fetched $848 million from Intel as the company expands its software assets.
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The most obvious differences between the two companies is simple: Wind River had a lot of customers and after six years, Cassatt had, well, a lot of potential. Given the pedigree of the engineers at Cassatt, I have no doubt that the technology will continue to develop and mature as part of CA's overall cloud strategy. But it's one thing to build stuff in a lab, and its quite another to get customers successfully using it.
If anything, Cassatt's high profile (including a cover story at Forbes and $100 million in venture investment) may have caused the team to be too ambitious and forward looking. Coleman claims that the big companies "copied his story," but more likely Cassatt was focused more on engineering the future than on solving customer needs. And at the end of the day, the only metric for knowing whether a company is doing a good job is to make sure you're solving problems customers care about. If you can take care of customers, the business will take care of itself.