Friday, August 31, 2007

Microsoft-RIM (M&A)--A Real Possibility or Just Speculation?

Over the last few decades, companies have always explored mergers and acquisitions as ways to grow out of trouble. Horizontal acquisitions and vertical integration emerge as first courses of actions for many companies. Microsoft has historically stayed away from major acquisitions that could change their corporate strategy, structure and culture.
Now, I saw this news story about possible acquisition of RIM. This may be nothing more than idle speculation. But it is worthwhile thinking how the mobile market will evolve: Specifically, what roles will Microsoft, Google and Apple have? Will Symbian and Palm have any distinctive value plays at all or are they nearly-closed chapters? What about the convergence of applications symbolized by Apple iPhone but we all know that it is only the beginning.
Clearly, we will see some acquisitions. But acquisitions should not be constraining as companies such as Microsoft strive to be relevant and dominant in the fast-changing marketplace. Will Microsoft-Blackberry combination win? We cannot really answer that question till we take a more complete look at the network of linkages that exists amongst the key players that straddle hardware, software and service domains. Also, acquisition is not always the most effective startegy under fast-changing conditions of convergence in functionality as we see in this space.

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