I was watching quite an interesting video and they mentioned Microsoft as a company that bought a lot of companies and killed their products. As a person familiar with that process I would like to share some insights on why the product will die when the company is acquired.

But before I start I will introduce some acronyms. C –company that was acquired. P – the product that company C is producing. M – the company that acquired company C.

Data

Sometimes a company is acquired because the company has some specific knowledge or data. For example, company M can acquire company C solely to get access to its client database. Surely they will “support” the product P for some time, but ultimately they would like all clients to move to their own product.

Sometimes company M needs access to some technology or patent that company C has. Effectively company M is buying company C only to get access to that and it doesn’t even plan to release a new version of product P.

Talents

Very often company M doesn’t need a product P at all. They need talented people who worked in company C. Talented people are very rare and especially rare when the area of that product is quite specific. For example, imagine software that simulates a magnetic field. As you could imagine there are not many people familiar with magnetic fields and at the same time also good software engineers.

Sure, it is possible to hire good software engineers and teach them a wonderful world of magnetic fields but software engineers are not really keen to learn that because they can spend this time learning something else that will help them with their career way more than magnetic fields. For example a new software technology, a new language, etc. Specialization in most cases only reduces their chances to find a good job later.

Very often lack of software engineers with good domain knowledge is a limiting factor in company growth. And acquiring company C allows company M to jump development and effectively they are buying time with money.

Burnt

Very often taking a product to its first release takes enormous effort and many people are simply burnt out. Long and very often unpaid hours take their toll on many people. So even when company M does want to release the next version of the product P it is often not possible due to the team being burnt out and not able to create a next release. Often people are sick of their product and would like to work on something new. Sometimes they are just chilling out after years of intensive work and don’t want to work as hard anymore.

Free to leave

Sometimes people are not happy with what exactly they are doing and want to do something else. For example, it could be a 3D designer stuck with writing scripts for their game. He wants to do 3D designs but nobody else can write level scripts. The company has enough 3D designers but not enough software developers. And that 3D artist stuck with scripts because a lot depends on him writing these scripts and they don’t want to let down the team by demanding 3D work. But when company C is acquired, they feel free to leave.

Key people

Very often key people in a new company got quite a lot of money and they simply lost motivation to continue doing hard work. Often their family members push them to quit. They didn’t see them for years of hard work but finally, the husband/wife got a lot of money and it is time to enjoy this money with their family.

Sometimes key people will leave because they love to work by themselves and they don’t want anybody above them to tell them what to do. They have their own style of management and they know that will not be possible to do in a new company.

In some cases, key people would like to try something new and exciting to them that was postponed for many years when they have to work to feed their families. But now when they have a lot of money they may leave to chase that opportunity.

Better job

Imagine you are a 3D designer. You have a good boss who appreciates your hard work. But after your company is acquired by company M, there is a chance that a new boss will be a bad person, the new position could be boring or you simply become redundant because company M already has enough 3D designers.

Instead, you could try to find a better job when you will have a very good recommendation from current management and when company C and acquisition are in all news. Also, it will be much harder to do when that 3D artist will have a new boss who doesn’t know much about them.

Conclusion

While it is simple to say that company M acquired some company C and killed its products but in reality it is not as simple as that. In many cases, M simply cannot release a new version of product P because they don’t have enough key people or key people are not motivated enough to do all that hard work again. And yes, in some cases company M is planning to kill product P from the beginning.

I hope it helps someone.