In an acquisition reminiscent of the dotcom era, it was announced last week that Cisco is buying Sourcefire for $2.7B! Sourcefire isn’t the first 3Pillar Global client to be acquired this year. In the first quarter, Oracle closed its acquisition of Eloqua at a value of $871M. Also announced in the first quarter was IHS’s acquisition of CARFAX’s parent Polk & Co. for $1.2B. The list of acquisitions here totals nearly $5B of business value.
While reflecting on the fact that these companies all built valuable businesses, as validated by their revenue growth and acquisition multiples, I began thinking about what else these companies have in common. It reminded me of a post I wrote earlier this year, Build, Buy, or Partner? How to Find Success in an Increasingly Digital World , in which I discussed the importance of driving time-to-value in today’s ultra-competitive software product development world. In addition to creating innovative products that filled giant unmet needs in the marketplace, all of the aforementioned acquired companies chose 3Pillar Global as a product development partner. It is gratifying to see the enormous market value of the business outcomes we have helped our clients derive.
Business literature for decades has discussed driving competitive advantage through focusing on core competencies. In this fast moving digital world where nearly every business model is instantiated through software and customer engagement reigns supreme, knowing one’s core competencies is key. Even more importantly, knowing what isn’t a core competency and when to turn to a partner to drive innovation can be the difference between success and failure.
When selecting a software product development partner, the following considerations and business model imperatives should be evaluated:
Some of the most successful companies on the planet, including Sourcefire, Eloqua, and CARFAX, have already deduced that software product development is not core to their business but must be leveraged as a competitive advantage. They all gained competitive advantage by selecting a product development partner that understood their business and was aligned to driving business outcome.