Corporate mergers - like marriages - can result in the whole being stronger than its parts -- or they can end in utter disaster. The IT industry has suffered its share of disastrous marriages. Here are the worst of the worst. (Previously: Caldera and SCO, Microsoft and Danger)
#8 - 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 Zsa Zsa 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 by Palm 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.
You still following this?
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 uninterested 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 announced that webOS would be released in the near future under an open source license.
Take one of the most established players in the enterprise software industry and merge it with one of the most established players in enterprise hardware, you get one hell of of combination, right?
Well, maybe not.
Sun Microsystems, once the darling of Silicon Valley, started to experience problems in the mid-2000's when the emergence of commodity Linux x86-based servers, the rise in popularity of Open Source software and pressure from other high-end enterprise systems vendors such as IBM and HP began to erode much of the company's core server business.
To counteract this downward trend, the company began to embrace a more Open Source philosophy with projects such as OpenSolaris, OpenOffice and Glassfish, and began to acquire Open Source software firms such as MySQL AB, VirtualBox and sponsor external Open Source projects such as Xen, which became the foundation for their xVM virtualization product line.
Unfortunately, many of these efforts were too late to save the company, and it became obvious in 2009 that the only route for the company's survival was that of being acquired by a much larger competitor.
IBM, Fujitsu and HP were thought to be the prime candidates, but in a last minute and completely unexpected move, Oracle came in with the winning bid for about $7.2 billion including buying off the company's debt.
What followed was to be expected. Thousands of employees lost their jobs, and many of the Open Source efforts that Sun began were quickly extinguished, including OpenSolaris. The OpenOffice project effectively disbanded and regrouped under the Document Foundation as LibreOffice, and the founding MySQL team forked into a number of different projects.
Under Oracle's leadership, Sun's core hardware business has continued to decline dramatically. To recoup the losses, Oracle filed copyright lawsuits against Google for allegedly using their Java intellectual property in their Android operating system, which uses virtual machine software called Dalvik that emulates the programming syntax of, but is not compatible with Java.
Oracle asked the courts for billions of dollars in damages in the hopes of turning their Sun lemon into lemonade. If Oracle had succeeded in collecting substantial damages from Google, it would have made its investment in Sun a smart one.
In the first round of trials, in 2012, a jury ruled in favor of Google and it looked like Oracle would win nothing at all. But then, in 2014, a Federal appeals court partially reversed that ruling, giving Oracle new hope. Both sides are back in court, and Oracle has since expanded its lawsuit to cover 40 major and minor releases over six versions.
While Oracle may not actually make money from this, it means that Android's rudder will always have Larry Ellison holding part of the tiller.
Either way you look at it, between the mass layoffs of talent, extinguishing of Sun's open source corporate culture and its attempts at weaponizing Java against Google, Sun has become anything but an honest woman under Oracle's stewardship.
Next up, even worse: #6, #5 and #4 (Coming tomorrow)