The VAR Guy

The VAR Guy always worries when two big, market-trailing companies try to merge. Alcatel-Lucent, for instance, has failed to compete with Cisco Systems. Microsoft-Yahoo would have faced an uphill battle against Google. Ironically, Microsoft’s failure to acquire Yahoo — at least for now — could be a blessing in disguise, especially for customers.

Microsoft is at its best when the company is forced to play catch-up. Think about the early days of Mac OS vs. Windows. Or Netscape vs. Internet Explorer. Or Oracle vs. SQL Server. Ultimately, Microsoft always finds a way to get back in the game.

Microsoft has a lot of distractions and interests these days — operating systems, applications, tools, Xbox, etc. — so getting back in the game against Google won’t be easy. But a merger with Yahoo would have been a major distraction inside Microsoft, inside Yahoo and across the IT landscape.

Some IT acquisitions certainly pay dividends. Cisco Systems and Oracle both have mastered the art of buying and digesting key companies. But the vast majority of mergers and acquisitions do little to propel tech companies forward, The VAR Guy believes. Instead, they wind up being a drag on employees, customers and perhaps even shareholders.

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