At some point, does it become silly for the biggest companies to attempt their own solutions instead of just buying the one with the most traction or best implementation?

One example might be how Amazon never got into self-driving cars themselves, but then last year bought Zoox.

There's no point in buying an unrelated business that you're going to leave operating as usual - you might as well just invest that money on the stock market instead, or pay it out to your shareholders. So presumably if a company is buying a solution to X then it believes it can gain a competitive advantage by integrating X into the rest of its business.

Given that, I would've thought that the earlier you buy the thing, the easier it is to integrate it with the rest of your company and the quicker you start gaining the benefits of that. Waiting to buy the winner shouldn't be any cheaper than buying all the competitors in the field at the start, because it's no secret how everyone's doing. So the only reasons not to develop in-house from day 1 are if you're not as good at developing things as a small independent company, or there's some other advantage that you're missing, or the option value from the fact that small companies can go bankrupt on their own (but that's only really applicable if the business is capital-intensive).

can you name a business that is completely unrelated to Apple or Amazon and would not see significant benefits from being absorbed?

For apple :- a farm, cattle station, cement factory, brick maker, carpets, upholstery, chicken farm the list goes on

Introducing Apple Chicken.

New improved version, only gives you the runs if you eat it holding the wrong way....

imagine having to go to the genius bar to get your chicken cooked the right way

The way I'd think about it is "would that business put any time into a partnership with Apple/Amazon if the chance came up". I guess you could argue that any business above a certain size would consider them worth talking to for some kind of cross-promotional deal even if that doesn't make a lot of sense on the face of it - Caterpillar? Hilton? But I think small focused companies outside of Apple/Amazon's core field wouldn't want to spend time on something like that. So B2B, non-tech, smallish companies - which by their very nature I can't name a lot of, but there's a lot of them out there.

In economic theory there is no benefit to diversification (which is what a company does when it absorbs another company) unless there are organisational improvements shared between the companies. If the acquired company is truly completely unrelated there would be no benefit at all as Apple isn't able to improve the running of an unrelated company. Being bought out by Apple might be a nice outcome for any company's shareholders (as they might get a premium on the their share prices), but technically there would be no improvement to the business in terms of expected revenue.

I work in health care. I also work for one of the biggest health care companies in the world. They are losing market share to smaller, more agile companies. Smaller companies who can whip out apps and solutions way faster than the company I work for.

Their solution is to buy the companies whose technology they want to leverage for their own, similar to what Apple is doing. This is a good tactic, but then creates another separate issue - how do you integrate all of these companies and their tech and employee's into your massive structure?

This has now created a huge bottleneck in that M&A (mergers and acquisitions) are tasked are buying companies and then having to take several years before they can fully integrate them into our company. It is a painfully slow process, but they still believe its faster to do it this way, then to try and build the tools and applications on their own.

I feel like the jury is out on whether this is a good long term strategy or simply replacing one problem for another.

I suppose it all depends on the extant in-house expertise. If you're in a "we don't know what we don't know" situation with respect to the problem, it's less risky to buy the experts with a proven record rather than spend an indefinite amount of time and money on R&D which might not yield success. Integrating into a familiar bureaucracy is at least the devil you know

I think it has an effect on people working for apple.

At some point acquiring other companies will affect the ability to hire and retain developers. It might also be a clue that their ability is diminished, or that internal ideas are not being promoted - whatever process Steve Jobs used to bring the good stuff to light.

The issue is not the money - it's the ability to integrate.

M&A and cooltech is by far the easiest part. Making use of the tech, the talent, operational integration, re-writes vs. integration, product alignment, etc. it's very hard on every level.

What do you do with the VP of a 50 person company, now they are managers in a little team, the software might be discarded, or just a few ideas used from it etc. etc..

As someone who have assisted with acquisitions, the tech part is often the most straight forward (unless you're dealing with multi-cloud solutions). The most challenging part is the re-alignment the culture and value of the acquired firm.

There's a delicate art in comforting the new members of the family that we're all in this together while systemically replacing their middle management with more suitable candidates.

I have to imagine any executive leadership team that agrees to an Apple acquisition is only looking at the exit package of stock they'll be counting in a couple years. They know what they're signing up for and know how the game works better than anyone. It's their setup for getting into venture capitol investing, retirement, etc. For a very small few they might stick around because they genuinely want to be part of the company's future.

Often the payouts are necessarily big enough, it entirely depends.

And just because you're an 'exec' at an 'ok startup' doesn't mean you're generally qualified at that level. It's very hard to jump to another, similar job in the field.

You only need 1 to pay off for it to be worth it. The rest can be deprecated and team reallocated.

Not saying it is right, but makes sense for a business of that scale.

There is a hidden principle-agent problem where the original company's intent gets distorted to align with broader corporate objectives.

The total market the acquired company could have penetrated never gets developed and fundamentally they decide to take an exit now for less risk and more cash early for what could have been a stronger contribution for the economy on the whole via a well-exploited niche.

A mundane example would be how the developers behind Firewatch were acqui-hired by Valve. They had a well-developed following and a hotly anticipated second product, an original single-player IP, somewhat rare nowadays. Half the team dissolved to work on Steam and the rest funneled themselves into Half-Life: Alyx. The new game was delisted from development.

No this is not quite it.

These acquisitions are not 'big bangs' like VC investments where one will make the bank.

They are large and small investments across the board - some for know-how, some for talent, some for product, some for brand (ie Beats), some for code etc..

An acquisition is expensive beyond the price tag, especially in terms of opportunity cost if you bet on the buy and it fails.

Maybe... Google seems to be taking that strategy but it feels like it leads to some kind of flaw in their thinking around product support.

How long has it been since Google had a notable successful acquisition? I'm asking because I can't think of anything recent.

In 2014 Firebase, Stackdriver and DeepMind (who then made AlphaGo). There's also Waze from 2013. The only thing I could call out after that is Kaggle in 2017. Maybe they will make something out of this year's Fitbit acquisition, but that's a bit early to tell.

I guess I wasn’t thinking about acquisitions so much as “you only need one success”. They throw a lot out there I guess hoping some of them will pay off, but it leaves them coming off as scattered to the outside.

It usually takes a while for an acquisition to be labeled a success, right?

Maps hasn’t languished at all.

Sadly Apple Maps’ POIs are still way behind Google Maps. I can usually treat Google Maps POIs as the ground truth now, after asking locals turned out to be wildly less accurate several times. I even had multiple Taxi drivers taking their own way instead of following gmaps and it was a total failure.

Just going to also assert that Apple Maps has significantly improved head over heels over the years here in Canada.

YMMV.

Google Maps has been playing catch up for the past year on features Apple Maps added in 2018.

https://www.justinobeirne.com/new-apple-maps

This is true. Apple Maps has improved significantly. I still wouldn't trust it like I trust Google Maps though.

It’s fine... Until Apple buys the software tools your working with and then kills the support for running on anything outside the Apple ecosystem.

Or, until they buy an enterprise grade NoSQL server and open source it?

https://www.theregister.com/2018/04/20/apple_foundationdb_op...

> That doesn't sound outrageous

how it doesn't? it does!

I'm just squarely keen on learning from their acquisition integrations team, that's where the magic happens to make any good use of these acquisitions.

> Easier to just spray the money & acquisition cannon around indiscriminately.

Apple does nothing, especially anything involving money, indiscriminately.