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The worst mergers and acquisitions in tech history
Updated: February 12, 2014: Valentine's Day is here again, and love is in the air. Couples flirting, courting each other and forming relationships. And sometimes those relationships result in marriage.
In the tech world, much of the same types of things occur. And as with human relationships they also can end up in marriages -- also known as corporate mergers. Mergers can result in the two parts being stronger than the whole, or they can end in utter disaster.
Here are worst tech industry mergers that we've ever set our sorry eyes on. To quote the J. Geils Band in their 1980 Rock n' Roll hit, LOVE STINKS.
Caldera & SCO
Once a prosperous, medium-sized and laid-back Northern California software company that produced successful and reliable vertical market UNIX operating systems for x86-based servers throughout the 1980s through the early 2000's, the Santa Cruz Operation (SCO) began its demise shortly after being acquired by Caldera, Inc., a Linux vendor based out of Provo, Utah.
Part of the Ray Noorda-backed family of companies known as the Canopy Group, the company re-named itself "The SCO Group" and soon began to find itself in a bit of an identity crisis.
SCO Group's first incoming CEO and former CEO of Caldera Ransom Love wanted to merge Caldera and SCO's Linux and UNIX product lines, and create a best of breed OS. Indeed, that would have been a marriage worth consummating.
SCO had partnered with Intel, IBM and Sequent briefly during the mid-1990s on "Project Monterrey", an attempt to unify, merge and port the best aspects of the company's UNIXWare OS and IBM's AIX to the new Intel Itanium as well as IBM's POWER processor.
With the rise in popularity of Linux and 64-bit x86 chips, interest in Itanium waned and the effort to market the completed IA-64 variant was scuttled.
SCO's failure to market the IA-64 version of Monterey resulted in Ransom Love being pushed aside and succeeded by Darl Mcbride. With McBride at the helm of SCO, the company became entirely focused on litigation as opposed to product development.
SCO not only sued IBM for alleged contributions of Monterey code to the Open Source Linux kernel, but also large customers, end-users and vendors of various Linux OSes, including Red Hat and Novell.
This turned the company into a pariah not only among the legion of Open Source and Linux developers but SCO's own customers and the entire technology industry. The litigation debacle went on for years, chronicled in gory detail on sites such as Groklaw.
SCO's sales of UNIX products went down the toilet, and was forced to lay off virtually all of its employees to focus entirely on its lawsuits.
In 2007, SCO filed for Chapter 11 bankruptcy protection. In 2009, Darl Mcbride was fired. Early in 2011, UnXis Inc purchased SCO's remaining UNIX software assets.
The sad tale of Palm
Palm has such a storied history with its relationships with companies that it acquired and companies that acquired it that it would be not be unreasonable to deem it as the Zha Zha Gabor of the technology industry.
A few years after its founding, Palm Computing was purchased by US Robotics, a company known mostly for producing data communications products.
Under that marriage, starting in 1996, the legendary PalmPilot PDA was sold and manufactured. But that marriage was short-lived, as networking company 3COM bought US Robotics in 1997. Unhappy with the way the company was going, the company's two founders, Donna Dubinsky and Jeff Hawkins, went their own way and formed Handspring, a company that produced PalmPilot clones.
In 2000, Palm was eventually spun off by 3COM into an independent publicly traded company. While this improved the company's finances for a time, by June of 2001 the company had lost over 90 percent of its publicly traded value.
In 2001, Palm also purchased Be Inc., a company that produced high-performance computer workstations that ran on BeOS, which was one of the original contenders to replace Apple's aging Mac OS System 7.
When Apple chose Steve Jobs' NeXT company and their OpenStep OS instead, Be was bought at a fire-sale price of $11 million. While industry followers expected the company to use the OS as the basis for its future products, Palm never did anything with BeOS.
In order to attempt to generate more revenue, In 2003 Palm split itself into two companies, PalmSource (for licensing the Palm OS) and PalmOne for producing the PDA hardware. In 2003, PalmOne also purchased Handspring to bring Dubinsky and Hawkins back into the fold.
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Palmsource, the company that was meant to become the software licensor, ended up being purchased by Japanese company ACCESS in 2005, which had the intention of creating a next-generation Linux OS, ALP (ACCESS Linux Platform) for mobile devices that would have Palm emulation capability. This went effectively nowhere.
What ACCESS did do was sell the trademarks for the name 'Palm' back to PalmOne for $30 million in 2005.
Palm continued to flounder for several years until 2009, when the webOS mobile operating system and the Palm Pre smartphone was introduced. While displaying innovative multitasking features and a unique user interface, the Pre was a market failure.
In 2010, Hewlett-Packard acquired Palm for approximately $1.2 billion. The Palm brand was discontinued in favor of HP's branding, and the company began development of new smartphone as well as tablet products that used webOS.
On July 4th, 2011, HP's TouchPad tablet went on sale to an unreceptive public and to extremely unfavorable reviews, many citing the product's sluggishness and numerous software bugs. After 45 days on the market and abysmal sales. Hewlett-Packard made the decision to discontinue the manufacturing of all webOS-based products.
In December of 2011, under the leadership of HP's new CEO, Meg Whitman, the company accounted that WebOS would be released in the near future under an open source license.
The future of any webOS-based products produced by HP or any potential licensee is currently uncertain.