Wednesday, March 23, 2011

What's wrong with acquisition's?

This is an interesting phase in Indian GIS Industry. I had strongly believed that Indian GIS market has an extremely bright future and I continue to carry the same belief. The type and size of projects that are and will be executed in India are extremely challenging and huge! And this trend will continue in foreseeable future. Additionally I expect that "Private Sector" will also "embrace" GIS based solutions much more than done in past. Hopefully, I will be able to share some of my thoughts on that subject, in near future.

There are "rumors" that a large GIS company will be acquired soon. I get calls, emails and questions on different forums from people asking me about my opinion on what's my take on the news. Here's what I feel:

1. There is NOTHING WRONG in acquisition. This is a normal market phenomenon. Open any business paper and you can read about mergers and acquisition's almost on daily basis!

2. Usually acquisition's are good for all parties. Company that spends money in acquiring businesss spends more money and efforts to unlock value and maximizing returns from the investment. This may lead to change in direction of acquired company and hence better growth compared to past! But then this change is what the original company needed!!

3. International market have several examples like NavTeq by Nokia, MapInfo by Pitney Bowers, ERDAS by Hexagon, Intergraph by Hexagob etc. and we have seen that acquired companies have done well. There can be argument about degree and direction but fact is that growth has happened. Indian examples are fewer and far between and that's largely because of small industry size.

4. Good employees and good managers stand to gain from such step. Those who have got into a comfort zone and don't want to change, are the ones who are likely to be negatively impacted but that number is usually very small!!

5. A deal is not done, until its done and hence it shall NOT BE be discussed in public. A rumor is a rumor and let's not speculate!!

Why am I writing this? It will help me to redirect emails and calls to this post and I will save some time!

Overall, this is exciting time! For the GIS market - in general. If this rumor is proved correct, my earlier belief that SI will play a much bigger and much more decisive role in Indian GIS industry will be resolved even further!!



Ramakant said...

Yes I completely agree with you the points mentioned in your blog. This is good for everybody who are working in that company /industry because they would have better opportunity and challenge to prove themselves with better compensation. Also they can gain better skills in doing big projects.


Sriram Prashanth said...

To a point, I agree with your thoughts. we see the changing face of GIS evolving with more maturity in terms of service offerings. GIS is poised to takeup a whole lot of opportunities visa-vis challenges both in the domestic and international spheres. Professionals always anticipate and adapt to change, If change is inevitable marked with growth. It's a welcoming phenomenon and helps them develop and venture into new market spaces and cater to a larger number of customers.

Well, the mergers you mentioned are all more of product-oriented businesses complementing each other by way of M&As. Let's keep the fingers crossed...

Sriram Prashanth said...

Hi Manoj

Please correct..It's not EXITING time but EXCITING time for GIS market!

Ravi Bhushan pandey said...

True, they are worried who are in comfort zone. Thanks for this post as I was willing to write to you on this topic.

JBENKAL said...

I like your blogs.
You give food for thought and insight to the staus of GIS Industry.
Dr. Jayasri Benkal

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