Interesting, but not surprising, yet not necessarily a net positive without some measurable results and without a lot of questions getting answered. Consilium has been bleeding red ink in this division for quite a few quarters. What's to say that this loss hasn't just been transferred over to Base Ten's books?
Also, having lived through the assimilation of dissimilar product architectures after a software acquisition, there are a couple ghosts in the closet that Base Ten needs to be wary of. First, it is unlikely that it would be cost effective to merge the two products together. The net cost would be many times the acquisition price.
The other big question is regarding the developers of the Flowstream products from Consilium - will they keep an office open on the West Coast (big salaries & big overhead), will they try to move some of them to the East Coast (not likely, too much work in Silicon Valley, and who want to move from Northern Ca to Trenton? <g>), or are users of Flowstream basically S.O.L.??? (it is very challenging to take over a product without at least SOME of the original developers, though it can be done - been there). And if this leaves Consilium's customer base upset, what has Base Ten obtained?
I suppose at face value, $1.5 M for eliminating one of your two competitors seems like a bargain, but we'll have to see how the hidden costs of bringing the two together get managed and whether a strategy for not pissing off their respective customer bases can be engineered.
As I've said before, they have some smart folks up there, and it is going to take every bit of their skills & talents to pull it off, with not a lot of time to do it.
I think POMS Corporation, (formerly Incode) is very well positioned to leap in after this and take some of CSIM's customer base. They were recently financed by Edison & have been, from what I can tell, marginally profitable for the past couple years. This should be an interesting battle. One best watched from the sidelines! <g>
Cheers! |
