The business goal is the only goal

eWeek: After last year's buyout of Scala Business Solutions, ERP and supply-chain vendor Epicor Software Corp. is now giving serious thought to more acquisitions, especially in vertical markets, said Epicor president and CEO George Klaus. Completed during the first half of 2004, Epicor's purchase of Scala has turned out to be "a very, very good acquisition [that] exceeded all our expectations," Klaus said this week, in remarks delivered at the Needham Growth Conference in New York. "It allowed us to become a truly global company," Klaus said. "We are looking at acquiring other companies, too."

This story in eWeek last Thursday caught my eye in particular because Scala Business Solutions was the last company I worked for, and was acquired by Epicor in June last year. Following post-acquisition restructuring, I left the company in October.

The quote from eWeek's story is illustrative of why companies do acquisitions - gain market share, extend their reach, sell more products and services. In Epicor's case, their purchase of Scala was indeed a good move in the highly-competitive ERP market that gives them an extended product range and access into new geographies that have high barriers to entry if you start from scratch, and a foundation from which to build further.

The success of Epicor's acquisition of Scala - painful though it was for the many Scala employees who were casualties in the restructuring that took place in the months following the deal closure - has been reflected in the robust results Epicor turned in for Q3 last year, and which are expected to be good for Q4 when they are announced later this month.

So scale this small story to the Oracle acquisition of PeopleSoft and the first moves (layoffs) taking place now.

It's not personal, it's business.

Edit 16 Jan: A friend emailed me overnight with a comment that the only reason companies do acquisitions is to enable shareholders to make more money and to screw the employees.

A bit cynical, I said in my reply. Then again, my friend has been a casualty of an acquisition twice in succession, so perhaps a lot of cynicism is understandable.

Makes you think, though - his experiences have influenced his outlook to the extent that his willingness to take risks in his job (sales in the software industry) has been substantially diminished. Not a good feeling in his current job, neither for him nor his employer.