Company acquisitions can be awesome for some and a nightmare for others. If you’re the company being bought, especially if you’re in a senior position… you might be popping the champagne and planning a trip to the Maldives.
Something that isn’t covered by IT blogs all too often is what to do when you, as the client, hear that your provider is being bought as part of a merger or acquisition. This is something which might not be so positive as it has the potential to really disrupt what you’re paying for.
Policy changes from the company doing the acquiring may be imminent. Many existing relationships will be reprioritised, staff roles will be changed and the service you once knew could be very different to what it started off as.
As a customer should I have merger and acquisition strategies in place?
Well this most certainly isn’t something I would usually suggest as mandatory for a company. In fact, their are plenty of other far more important strategies that would be of massive benefit to you. However, in the IT industry, whatever portion of it you find yourself in, the possibility that your cloud services provider may be acquired is very real.
Company acquisitions can occur sometimes out of nowhere and when they do, it can be a serious problem for unprepared businesses. To shoot you an example, at Cloudhelix we leverage Pernix-Data for our storage across all of our data centres. Not too long ago, Nutanix launched a company acquisitions plan to absorb Pernix-Data.
This in turn lead to the end of all software support from Pernix by the end of 2017.
Even as a cloud hosting provider with decades of experience between us, it was still a shock and required a severe pivot that we had to make the best of for our clients.
Fortunately for us our merger and acquisition strategies plan was ready and waiting to kick into place.
Could unexpected disaster allow you to offer more value to your clients?
The answer to the above statement is yes, yes it absolutely could.
We used it as a solid opportunity to take a good long look at the market so we could scrutinise and comb through all the available options. We wanted to make a decision that wouldn’t leave us in the same situation again moving forward from Pernix-Data.
We took it as an opportunity to remind ourselves of our clients needs, what their priorities are and how you could find a positive in this situation. We wanted to deliver extra value to them despite this unexpected acquisition.
For our clients that priority is unparalleled speed and performance on their storage. Taking this into account, we landed on hyper-converged flash storage arrays utilising arguably the best and quickest storage performance in the UK right now.
This wasn’t just a response to one clients needs, this is an infrastructure improvement that will benefit every customer we have old and new, across the board, at no extra cost to them.
Even when you feel it could be a smooth take over and that it shouldn’t compromise your service, the likelihood of everything remaining as it was pre-acquisition are slim. Staff you relied on could be reallocated and repurposed in different departments, leaving you with a problem to solve. Even a small change on the provider's side could drastically impact your business.
It’s not pessimism but you have to see the reality in the situation as we did. Regardless of the amount of support offered or promises made, the company doing the buying may have very different plans in six months time.
Company acquisitions can push you into justified change, and you’ll be better off for it!
Changing service providers can mean a lot of changes, yes. However I would try to see it as a positive opportunity as we did, and to assess the market and your competition while you’re at it.
Yes there may be some attached costs – you may not have depreciated the total value of some assets as originally planned, or your development team may even be suffering from vendor lock in if your service provider had specifically built your tech around a specific platform.
Even in this situation, it’s still not the end of the world. Utilise third party service providers and look to build relationships with a new provider that has already IPO’d so you know this won’t happen again.
Take the qualities you really liked from your previous provider and use their company acquisitions process to carry these points forward as a priority with your next provider.
"We turned something that could have derailed us as a business into a massive value add for our customers and a triple increase in performance across all our data centres. This means amazing things to be announced in a new partnership with Pure, the best performance we’ve ever recorded for our customers and overall a great learning experience for us as part of the process."
You can too, give us a call using the number or contact form below and we’ll help you make the most of whatever you might be facing.