Re: Zayo woes

[Mike Hammett <nanog () ics-il net>]

As someone that has been planning to be in the acquiring seat for a while (but yet to do one), I've consistently passed 
to the money people that there's the purchase price and then there's the % on top of that for equipment, contractors, 
etc. to integrate, improve, optimize future cashflow, etc. those acquisitions with the rest of what we have. 




----- 
Mike Hammett 
Intelligent Computing Solutions 

Midwest Internet Exchange 

The Brothers WISP 

----- Original Message -----

From: "Matthew Petach" <mpetach () netflight com> 
To: "Bill Murphy" <William.Murphy () uth tmc edu> 
Cc: "Mike Hammett" <nanog () ics-il net>, "Randy Carpenter" <rcarpen () network1 net>, "nanog" <nanog () nanog org> 
Sent: Tuesday, September 19, 2023 9:41:35 AM 
Subject: Re: Zayo woes 







On Tue, Sep 19, 2023 at 7:19AM Mike Hammett < nanog () ics-il net > wrote: 




[...] 


I've never understood companies that acquire and don't completely integrate as quickly as they can. 







Ah, spoken with the voice of someone who's never been in the position of: 
a) acquiring a company not-much-smaller-than-you that 
b) runs on completely different hardware and software and 
c) your executives have promised there will be cost savings after the merger due to "synergies" between the two 
companies. 
^_^; 



Let's say you're an all J shop; your scripts, your tooling, everything expects to be talking to J devices. 


Your executives buy a company that has almost the same size network--but it's all C devices running classic IOS. 


You can go to your executives and tell them "hey, to integrate quickly with our network and tooling, we need to swap 
out all their C gear for J gear; it's gonna cost an extra $50M" 
The executives respond by pointing at c) above, and denying the request for money to convert the acquired network to J. 


You can go to your network and say "hey, we need to revamp our tooling and systems to understand how to speak to C and 
J devices equally, in spite of wildly different syntaxes for route-maps and the like-it's going to take 4 more 
developer headcount to rewrite all the systems." 
The executives respond by pointing at c) above, and deny the request for developer headcount to rewrite your software 
systems. 


The general result of acquisitions of similar-sized companies is that the infrastructure runs in parallel, slowly 
getting converted over and unified as gear needs to be replaced, or sites are phased out--because any other course of 
action costs more money than the executives had promised the shareholders, the board, or the VCs, depending on what 
stage your company is at. 


Swift integrations cost money, and most acquisitions promise cost savings instead of warning of increased costs due to 
integration. 


That's why most companies don't integrate quickly. :( 


Matt