This trend started a few years ago. Typically, the goal of the acquiring company is to make the startup an "honors' college" that evolves into an R&D lab. Staples Innovation Lab is one example that's highly visible in the Clojure community.
This can be politically messy because it leaves open questions about extension of corporate policies (do people used to having 5+ weeks of vacation end up on 3? how do transfers work?) and division of labor, but I think it's a good thing that's generally done with the right intentions.
Ultimately, large companies have finally realized that the best way to get top talent is to revive R&D. If you don't have the R&D culture that top talent demands, you get eaten by software instead of participating in the eating. One could just pay people more, but the costs of this are exponential (20-30% raises each year to keep people happy, as opposed to 5-10% when they enjoy their work) and only finance can afford that for senior people.
I'm glad to see it. The honors colleges, as they become more numerous, are going to provide young talent with much better places to start their careers than VC-funded startups or traditional large companies. I think we'll see it become possible again for the entry-level programmer to have a solid 5-year start with increasing scope of responsibility, instead of having to job hop and play politics to get real projects in the way that most of us did when we were at that point. (Or maybe I'm being unrealistically hopeful.)
This "trend" is started much earlier, when mostly media and entertainment companies started buying "tech" companies. They were under they illusion that they didn't need to foster technology but were just buying a commodity, and subsequently all further development came to a grinding halt and the engineers fled.
Is this new wave of buy-ins fundamentally different or is Staples an outlier?
The main potential difference I see is that unlike media giants, many of these companies have continuous product development at their core, albeit in wildly different forms.
Also, such attempts at integrating start-ups have often failed for companies that are actually in the same business (Google, Yahoo, Microsoft). I don't see the odds of this being a fruitful strategy being very good.
I might be nitpicking a detail, but this bullshit has to stop. Dear tunnel-visioned SF residents, Ford Motors and Monsanto are not non-tech. (Uber is). This makes the whole premise of the article flawed.
I really wonder what kind of rock you must be living under if you think that five guys hacking a ruby on rails site is technology, and making cars isn't.
I don't think it's nitpicking. Sometimes it seems like if a Macbook Pro and the latest JS framework on top of Ruby or some functional language isn't involved, especially if the social lives of 20-somethings or 'disruptive' re-treads of ages-old B2B 'services' aren't involved, it's off the radar of the Bay Area.
That said, I don't think it's unreasonable to be skeptical of claims that non-software companies are "technology companies." My stints in non-software companies left a sour taste in my mouth with respect to their understanding of how our world is changing, specifically with how important software is for the development of other new technologies. They put software development in the same bin as other IT work like laying network cable or housing data servers, when it really belongs in the same bin as other technology-driven research and engineering departments. So the 'respect' argument (inferring here) you're making kind of cuts both ways, I think.
Certainly cuts both ways. That said, my personal experience is somewhat opposite of yours. I worked at a:
* Printer manufacturer (TC def: non-tech). Software is at R&D.
* Chip machine maker (TC def: non-tech). Software is at R&D.
* Online marketing consultancy (TC def: tech). Software is with the IT department.
All that said, people at the non-software technology firms listed above do tend to have a certain disdain for software, mostly driven by a complete misunderstanding of what kind of complexity software people actually deal with. After all, all the physicists and mechanical engineers have written some while loops too, in their days. How difficult can it be? Anyone who understands if and while can write software, right? :-)
Still, at least they considered software technology, too, and not "IT services".
Monsanto, at least, still seems like an IT-based software company to me. I mean they have their hand in other things too, as large companies tend to, but some of their divisions[1] could easily be a YC-backed startup in nature.
Some parts of this trend worry me. For instance, Under Armor buying MapMyFitness. People will still buy Under Armor products even if they don't have the post-purchase technology connection. How exactly does owning the app that many people use to log their fitness data help the company that makes the clothing? Are people commenting on MapMyFitness about how their latest cold gear purchase impacted their run this morning? That would be surprising to me. Startups being bought by non-software companies is going to be a bad experience for some people. It's hard to do your best work when your work isn't the focus of management, and by extension, the company.
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[ 4.7 ms ] story [ 36.7 ms ] threadThis can be politically messy because it leaves open questions about extension of corporate policies (do people used to having 5+ weeks of vacation end up on 3? how do transfers work?) and division of labor, but I think it's a good thing that's generally done with the right intentions.
Ultimately, large companies have finally realized that the best way to get top talent is to revive R&D. If you don't have the R&D culture that top talent demands, you get eaten by software instead of participating in the eating. One could just pay people more, but the costs of this are exponential (20-30% raises each year to keep people happy, as opposed to 5-10% when they enjoy their work) and only finance can afford that for senior people.
I'm glad to see it. The honors colleges, as they become more numerous, are going to provide young talent with much better places to start their careers than VC-funded startups or traditional large companies. I think we'll see it become possible again for the entry-level programmer to have a solid 5-year start with increasing scope of responsibility, instead of having to job hop and play politics to get real projects in the way that most of us did when we were at that point. (Or maybe I'm being unrealistically hopeful.)
Is this new wave of buy-ins fundamentally different or is Staples an outlier?
The main potential difference I see is that unlike media giants, many of these companies have continuous product development at their core, albeit in wildly different forms.
Also, such attempts at integrating start-ups have often failed for companies that are actually in the same business (Google, Yahoo, Microsoft). I don't see the odds of this being a fruitful strategy being very good.
I really wonder what kind of rock you must be living under if you think that five guys hacking a ruby on rails site is technology, and making cars isn't.
That said, I don't think it's unreasonable to be skeptical of claims that non-software companies are "technology companies." My stints in non-software companies left a sour taste in my mouth with respect to their understanding of how our world is changing, specifically with how important software is for the development of other new technologies. They put software development in the same bin as other IT work like laying network cable or housing data servers, when it really belongs in the same bin as other technology-driven research and engineering departments. So the 'respect' argument (inferring here) you're making kind of cuts both ways, I think.
Still, at least they considered software technology, too, and not "IT services".
[1] http://www.fieldscripts.com/