Tuesday, 11 March 2003 8:30 am
In the current depressed and flat technology markets, the only way to grow is to take market share away from your competitors. Some companies are proving adept at it.  IDC reported yesterday that in the database market, IBM, Microsoft, and NCR are taking market share from Oracle and Sybase.  In cell phones, Gartner Dataquest also reported yesterday that Nokia, Motorola and Samsung are taking market share away from SonyEricsson and others.  In computer servers, IBM and Dell are taking market share from H-P and Sun.  In core routers, Juniper is taking significant market share from Cisco.

Consolidation of high tech companies has been widely predicted.  The analysts and writers predicting consolidation have been anticipating an orgy of mergers and acquisitions.  But not much has happened, other than the H-P/Compaq merger.

Perhaps what we are starting to see is consolidation of a different variety – the winners simply take the market away from the losers.  No messy mergers, troublesome goodwill write-downs, huge fees to the investment banks, retention pay, power struggles, culture clashes, strategic confusion, or loss of key talent to worry about.  No need to figure out what to do with huge debts on the target company’s balance sheet. Just win over your competitors’ customers, fair and square, and let your competitor disappear on its own.  If necessary, buy your competitor’s intellectual property rights in bankruptcy liquidation.   With some of the balance sheets I am seeing, it wouldn’t take much these days to push competitors into liquidation.