Why and how does framework/library choice matter from a mergers & acquisitions point of view?

Question

It was mentioned to me the other day that choosing (say) ASP.NET MVC and LinqToSql (both MS libraries) over MonoRail and NHibernate would make the software product built a more attractive company asset when considered in the context of mergers and acquisitions.

As in, because the first two are MS libraries, and the 2nd two are open-source libraries.

Why?

Note: I'm not after answers saying things like "but that's wrong; Castle is far better than MS MVC" - I'm wanting to know the underlying reasoning for business people thinking that closed-source-based products being more valuable than open-source-based products.

Note 2: I realise this is not a programming question, per se. On the other hand, it is, entirely, because this knowledge will influence the framework available to develop within, and potentially eliminate other choices. Unfortunate as that may be.

Answer 1

It's the old adage that "nobody ever got fired for buying IBM". Plenty of dev houses stick with the MS stack through and through because it requires no justification to "the management" because MS stuff is generally well supported, and people feel more comfortable dealing with a nice big company.

It's generally not a problem in small dev houses (hopefully!), but should that small dev house be bought out by Super Mega Corp. then the new "management" might frown on anything that requires "justification" to use.

Unfortunately politics rules all at the end of the day. Does that make sense? :)

Answer 2

I think the business people just find it comforting when there's someone answerable for the product they are buying. This could translate into availability of tech support or just the opportunity to sue someone when things go wrong.

Closed source fulfills such requirement. Open source doesn't.

And if you think about it, such attitude is not entirely irrational. Business is an undertaking full of risk and anything that (even on the face of it) appears to mitigate some is bound to look tempting.

Answer 3

In addition to Steve and Fredericks answers, the aquiring company is likely to look at the SDK and tools used from a skills availability perspective. Say for example they want to fire all the devs (god forbid) and offshore all future development. It will be easier to do so if the tools used are the most widely used ones. While the open source might be freely available, the skills to use it effectively might be much scarcer.

Answer 4

Searching by MSSQL on Monster.com: 111 job offers.

Searching by MySQL on Monster.com: 1100 job offers. (Open Source wins)

Searching by C#: 3229 job offers.

Searching by Java: >5000 job offers. (Open Source wins)

Searching by ASP.NET: 2200. (MS stack wins)

Searching by Ruby: 363.

Searching by Python: 640.

(I had to search by PHP probably)

I would believe that a project using an obscure technology is less attractive to the investors (it is harder/more expensive to find people to continue development), but a lot of Open Source technologies is so widespead, that this consideration is no longer valid in general.

Still, Ruby on Rails and Django are relatively new, so it is fair that one should consider availability of trained programmers on the market.

Answer 5

Its basically a question of market penatration. IF in a given industry 60% of the companies use Sqlserver, ASP and .NET. then the cost of integrating your company after a merger will be less if the same basic technoligies are used. If you use a different stack then the integration costs will be higher and these extra costs should be taken into account when valuing a takeover prospect.

Having said that technoligy compatability is probably way down on the list when a merger is being evaluated.

Also some of the biggest integration nightmares I have seen involved companies that used the same technoligy but in different ways.