"The Cheapest Way To Build An Empire"

This is stream of consciousness, maybe ill formed, but I wanted to chunk it out to look at it later.

An oft-touted wealth-creation strategy:

Expectation of being the target of a purchase or merger; planned aforethought; sure, we could slip into the set of argot containing "flip," but we won't. The principles are bearing risk and seeking commensurate reward.

There's another mind set, a kin to Expectation:

Anticipation of being the target of a purchase or merger, but it wasn't always so; in the beginning, there may have been a desired independence from equity lenders, perhaps an aversion to debt, and so forth. Here, anticipation truly means hoped for, and the hope arises in the firm’s evolution.

And a cousin to Expectation and Anticipation is: Acquiescence to Inevitability.

In Orson Scott Card's "Pastwatch," a character named Hassan identifies an interesting principle, "reward for surrendering," where the tactical and strategic movements of a conquering nation "gives the surrounding nations a reward for surrendering. And a reason not to rebel."

Another character, Hanuhpu, expands on this thought with an example from history:

"Just the way so much of the Roman Empire didn't have to be conquered. The Romans seemed so irresistible that kings of neighboring countries would make the Roman senate the heir to their thrones, so that their kingdoms would pass peacefully into the Roman system. It's the cheapest way to build an empire, and the best, since there's no war damage to the newly acquired lands." (Orson Scott Card. "Pastwatch: The Redemption of Christopher Columbus. Tor. NY, NY. 1996.)

Enticing succession and perpetuation solution for the "retiring royalty." From surviving corporations' perspectives, analogous to business development through affiliation, acquisition or merger.

The politics are the same, too. Egos. Saving face. Avarice. Risk and Reward.

In 1995, the vendor that provided the customer service and financial accounting software my company (I was an employee) used was acquired by one of its larger competitor. Our vendor's software ran on an IBM/Unix platform. The database was flat. The worry was Y2K computing errors five years hence.

The installed base of users of this software was fairly large. The acquisition did not arise from the desire to take a shortcut to better products and technology. It was the customers these particular Romans wanted. Evidence of this came quickly. Representatives came calling to explain that "we are migrating from your legacy system to a new Windows-based program."

For us, the portent was increased item cost (data base license, user licenses, training, etc.) and decreased productivity in selling our products and servicing our customers.

This company disappeared, swallowed up like Atlantis in an ocean of competition.

Rather than allow talk of "migration from legacy systems" and such become a ring in our noses by which we would be tugged and pulled on a path dictated by the vendor, we requested bids from other vendors.

We knew we wanted a Windows-based system (remember, this was 1995) and we preferred a relational data base for greater reporting capabilities. We wanted to avoid Y2K disasters that were widely predicted at the time.

We identified two vendors and asked them to present their stuff. We selected the winner.

Okay, here's the part that is relevant. I accompanied the team that went to the winning vendor’s corporate headquarters to negotiate terms for licensing, installation and training. This company had their own "legacy system" but had spent their cash and human capital on building a product from scratch based on the Microsoft SQL Server.

Bingo! These guys created something new and exciting. Windows based, not a DOS product running on Windows, but a from-the-ground-up Windows product. A relational database allowing us to map data fields to Excel or Access for custom reporting. Client / Server operation, which was preferred in those days.

Our contract signing was in May. The company was acquired in August of the same year.

The purchaser in this case was not interested in the installed base of customers. In fact, there were very few installations. It was brand new software. Moreover, the targeted vendor's customers on the vendor's "legacy" DOS-based software were comparatively small in number.

The purchaser was in it for the product, the technology, the resources. They did not have to risk capital in product creation, building, testing, and retesting.

Today, the purchaser in this transaction is in the top two of vendors in its particular industry.

EBay, Google, Amazon, Microsoft, Oracle, Berkshire Hathaway. Other examples you could name. These sovereignties have prosecuted both types of acquisitions: buying customers and buying technology. And like the Caesars, these empires have allowed in many cases the exiting royalty to live the remaining days with some dignity, lots of wealth, but with declining influence and authority.

It is doubtful that surrounding countries planned to flip (dang, I used that jargon) their thrones to Rome. No. I’d ascribe capitulation to Rome as Acquiescence to Inevitability.

“The Romans seemed so irresistible that kings of neighboring countries would make the Roman senate the heir to their thrones, so that their kingdoms would pass peacefully into the Roman system.”