Comment by threeseed
7 years ago
I really don't understand the point of this anecdote.
This is standard practice for almost every acquisition. If the startup didn't want to be part of the IBM way of doing things they shouldn't have agreed to be acquired by IBM.
In fact the rare situation was the Facebook "acquire but treat more like an independent subsidiary" model. And even that didn't last all that long.
> If the startup didn't want to be part of the IBM way of doing things they shouldn't have agreed to be acquired by IBM.
In this situation, I don't think it makes sense to think of an organization as a single, monolithic entity. In this context, the only sane way to think about Red Hat is as over 12,000 employees, plus I-don't-know-how-many shareholders.
Only a very small number of those "agreed to be acquired by IBM". Probably less than 0.1% of them. They are probably also going to be the ones who are going to be the least affected by how IBM operates internally. They've now got FU money, so, as soon as whatever retention agreements they may or may not have signed expire, they'll be prancing out the door.
Everyone else probably knows very little about it - the linked press release indicates that this is probably a surprise for about 12,000 Red Hat employees, most of whom won't be getting any additional details until tomorrow's all hands meeting.
management and the board agreed to the deal. Companies are not democracies , while it is nice to have grassroots approval , it is a top down process. the very nature of these transactions make it impossible to disclose until it is done.
Ultimately in a decision like this the board has only one entity to consider -shareholders , if they believe the deal will create more value to shareholders they should consider it
Value maybe subjective Of course shareholders could be against for ideological reasons and prefer not take the money, that doesn't seem to be the case here.
While I agree with you that decisions of this nature are made top-down, the value in RedHat is its employees (as RedHat sells support for Open Source software). If a mass exodus occurs because of this acquisition, RedHat will no longer be providing value to the shareholders and will become a long running debt with no future in the black on IBM's books. It is quite possible that IBM will fail at properly handling RedHat after the acquisition due to entrenched business culture that is incapable of grasping the cultural change required to support a business model such as the one that RedHat employs. Business often appears as a bedfellow with economics with regards to ignoring the "human factor".
Re: "Importantly, Red Hat is still Red Hat. When the transaction closes, as I noted above, we will be a distinct unit within IBM and I will report directly to Ginni. [...] They understand and value how and why we are different and they are committed to allowing us to remain Red Hat while scaling and accelerating all that makes us great with their resources."
Standard acquisition speak. Means nothing.