Beware the Frankenstein of the Cloud

Today’s announcement that Puppet Labs acquired Cloudsmith, coupled with other recent acquisitions in the Cloud space, including IBM’s pickup of SoftLayer, CenturyLink absorbing AppFog, and Aspect Software’s deal for Voxeo highlight several important and possibly disturbing trends.

First, the pace of consolidation in the Cloud marketplace appears to be accelerating, a sign that this market has reached the next tier of maturation. Every nascent technology market goes through this phase, after all, so it was just a matter of time for consolidation to hit the Cloud.

But it’s more important to understand why such acquisitions take place. Sometimes (as with the SoftLayer acquisition), the focus is on services, and the new division essentially forms the basis of a new or expanded line of business. In other cases, the real target of the acquisition is the engineering talent – the product is secondary, or sometimes of no value at all.

But all too often, the reason for the acquisition is entirely or primarily to add software product capabilities to the mix. It takes a certain number of person hours to write good code, after all; from the perspective of the acquirer, the plethora of tech startups are essentially innovation engines ripe for the picking. Want to build out a software product line quickly? Put down the development tools and pick up the checkbook.

The problem with acquiring companies for their code is that meshing the software from a startup with all the code currently in house is easier said than done. Sometimes the startup took shortcuts to get products to market. Even if they didn’t, they typically follow different coding conventions, API styles, etc.

And if the acquirer is sucking up several startups, as Oracle did in the 2000s on the road to building the Oracle SOA Suite? The risk is that you’ll end up with little more than the Frankenstein strategy: buy a bunch of parts and hope for lightning. The last think you want is for your Cloud strategy to depend on lightning.

True, mishmashes of different products integrated at the PowerPoint layer may be routine for traditional enterprise software. But for the Cloud? Perish the thought. Can’t we finally get away from business as usual? This is the Cloud, people!

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