Hey Larry, Small Is Beautiful ...

By Mark Hall

October 10, 2005 12:00 PM ET

Computerworld - ... and probably better, too. That seems to be the lesson learned by Hewlett-Packard Co., which has recently eschewed megadeals for a series of smaller ones. For example, HP's agreement to nab RLX Technologies Inc., which was announced last week, practically
amounts to a rounding error for a company its size. HP didn't disclose the price it's paying for RLX. But Richard Evensen, an analyst at Technology Business Research Inc. in Hampton, N.H., estimates that HP will fork over $30 million, primarily to get the blade management software that Spring, Texas-based RLX sells. Evensen says the practice of acquiring small IT vendors to boost a company's competitive position in the market has been perfected by Cisco Systems Inc. And he argues that going forward, HP is also likely to focus on buying smaller companies with valuable intellectual property assets that it "can quickly and successfully integrate" with its existing products.


Josh Pickus, senior vice president and general manager of CA's Clarity division

Likewise, Computer Associates International Inc. has adopted a strategy of buying smaller and wiser, says Josh Pickus, who was CEO of Niku Corp. before CA bought the company in August. Now he is senior vice president and general manager of CA's Clarity division, which is named for Niku's IT governance software. CA "has retooled the way they do acquisitions," Pickus says. "It's not about squeezing profits from big, dying businesses. It's about getting growth from new opportunities." He says CA expects that the three companies it bought recently -- Niku, Netegrity Inc. and Concord Communications Inc. -- will bring half of its growth in the coming years.
Oracle Corp. CEO Larry Ellison likes big takeovers, as shown by his acquisition of PeopleSoft Inc. and last month's deal to buy Siebel Systems Inc. (In a similar vein, Ellison cruises the globe in the world's biggest yacht, according to Vanity Fair magazine.) But even he appears to appreciate small deals. According to Evensen, of the 10 acquisitions made by Oracle this year, five have involved companies with less than 100 employees.


	Ash Nashed, CEO of Congoo LLC

Does the world really need yet another ...
... search engine? Maybe not one like Google or Ask Jeeves, but Ash Nashed, CEO of Congoo LLC in Branchburg, N.J., has something else in mind. Congoo's namesake software searches premium sites along with the rest of the Web, then lists the premium content at the top of the search results, Nashed says. His company is working on deals with providers of general and financial news so

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