Mergers and Acquisitions

[NetworkGuy]

For anyone who has been involved in Mergers and Acquisitions, there are a number of facts which are common to all of these events.

First, there is a mandatory “quiet time” before the signing of the contact. Both sides are prohibited from talking about the proposed Merger or Acquisition. In addition, both sides are prohibited from changing ANY business practices in any way that might lead people guess an acquisition was imminent. (Like a fire sale of HD-300 extenders.)

In almost all cases when the event is announced, it comes as a complete surprise to the customers of both companies. The immediate reaction of the customers is be concerned about “What does this mean to me?”. One of the worst things that can happen is panic. Based on Jeff’s statements, existing customers have a year to figure out what to do:

1. For those people using trial versions or waiting to upgrade, a patch was provided to allow them to upgrade to the latest release.
2. SageTV’s EPG data will continue to remain active for at least one year. (And Slugger has already developed a plug-in to use Schedules Direct.)
3. The warranty on HD-300 is for one year from date of purchase. Google will be honoring the 1 year warranty policy on the HD300.

Unfortunately for those people on the verge of making purchases, they have very limited choices. They can choose to wait and see what happens or move to a different solution.

But why did SageTV get acquired? Well, companies get acquired for a lot of different reasons. The following are just a few:

1. Buying the customer base. Considering the size of the customer base of Google vs SageTV and the fact that the sale of products was stopped, I do not think that this was the reason.
2. Technical Talent / Expertise. It is much easier and cheaper to hire the people you are interested in instead of purchasing the company. Again, this is probably not the reason.
3. Remove a Competitor. Although it might be fun to think that Google TV felt threatened by SageTV, I seriously doubt that was the reason.
4. Intellectual Property. This means that Google saw something different and unique in SageTV that they felt would give them a market advantage. We who have been customers of SageTV for a while have always known this. I am inclined to think this was the reason for the acquisition.

So if SageTV was acquired for their Intellection Property, what does the future hold for us? It means that hopefully, those things we saw that make SageTV unique and different will continue in a new Google product. But remember, Google did not acquire SageTV to keep things the same. They plan on developing those unique aspects and making them bigger and better. But first, Google needs to perform “due diligence” to really understand what it is they have acquired. Then they need to see how SageTV’s Intellectual Property fits into their architectural plan. Then they need to explain it to their Marketing Department who will develop Market Plans. We are used to quick answers and decisions from Jeff; don’t expect that from a company the size of Google. It will probably be months before we hear any concrete answers to our questions.

Will it be the same as the SageTV we have come to know and love? NO. Hopefully it will be better.

We have about a year before existing customers will start to run into operational problems. All we have right now is speculation and too many people are acting on speculation. As the facts start to be released, I will consider if the direction Google is going and if it will meet my requirements. In about 6 months, I will take a hard look at the facts and make plans to migrate to a new environment. I have no idea what that will be.

For now, I am taking a wait and see attitude.

And I intend to continue to enjoy my SageTV for as long as possible.

[WellThen]

Thanks for the sanity post. While I'm not (yet) thrilled with the potential changes, panic won't help.

[bits]

I will use SageTV for as long as the guide is supported, my HD's die or I move in another direction. SageTV is dead....yes some part of it may be transplanted into a terminally ill GoogleTV but it is dead and there is no reason to panic. After all we are talking about boob tube stuff and not life or death.....right!

[jptheripper]

Well said, and thoroughly agreed.

I loved replaytv, and it died.
I loved beyondtv, and it died
I tolerated Vista Media Center (ugh)
I loved sagetv, and it died.

I will stick with sage as long as I can, and then on to the next great thing.

I hope it will be GoogleTV with a sage backend. I have no reason to think it wont be, but in the end, its tv.

[GKusnick]

It also seems worth pointing out that getting acquired is the expected outcome for most small tech companies (or at least the ones that don't go broke). It's very rare for a small company to grow into a large one with the founders still in control. Selling the company is not a betrayal of their principles; it's what they've been hoping for and working toward all along. It's how they reward their employees and families for all the long hours, short vacations, and belt-tightening they've had to endure over the years.

Yes, it causes some uncertainty for us, the customers. But we're not the only stakeholders here; there are other people who have put a lot into this and deserve to get something back. And savvy tech users should know that something like this was in the cards from day one, because that's how the tech industry works.

[Audacity]

Just speaking for myself here: I'm not generally disappointed that SageTV was purchased by Google. Quite the opposite, actually. I'm pretty sure that streaming video Is The Future(tm) and SageTV was lacking in that department. I'm currently dealing with that reality by using a HTPC that can run the SageTV app as well as a browser so I can access streaming video sites. Maybe Google can do a better job with the Chrome browser from a TV (although I've figured out a pretty effective use case scenario for myself already).

My only disappointment with the acquisition was Google taking the SageTV product off the market. I find that very inconvenient. Sure, I'm glad Google is working on the next generation Google TV. I just want to be able to buy more SageTV client licenses should I choose to do so.

[heatvent]

NetworkGuy,

Nice summary. However, I think the "due diligence" you speak of is something that happens during the so called quiet period. Between letter of intent and signing of the deal. I think what we have going on now is the integration plan.

My guess (since I can voice it for free), is that reasons 2 and 4 were on Google's list of reasons. 2, really as a byproduct of 4. If you are willing to buy a company for their IP, chances are you want to keep the "brains" behind the technology to further develop it and or new technologies.

I couldn't agree more on 1 and 3. I am very doubtful that Google wants anything to do with the hobbyist/HTPC market and the bending of rules with cable companies and other media providers.

My 2 cents is they wanted Sage's DVR/placeshifter technology and Jeff's expertise to be integrated into some other product (GoogleTV?). I wouldn't expect SageTV or anything like it in the future. Giving upgrades, leaving the forums open, EPG for a year, etc. is all about giving Sage's customers some time to transition to another product before the ambilical cord is cut. I am sure Google wouldn't mind if GoogleTV is part of that switch but I am guessing most, if not all SageTV users will go to some other SageTV like product that lets us not get a cable box and try to be masters of our own domain. I think Google is just trying to do the minimum moral obligation to the people who paid good money to use SageTV's products.

[reggie14]

Originally Posted by NetworkGuy

1. Technical Talent / Expertise. It is much easier and cheaper to hire the people you are interested in instead of purchasing the company. Again, this is probably not the reason.
   [snip]
2. Intellectual Property. This means that Google saw something different and unique in SageTV that they felt would give them a market advantage. We who have been customers of SageTV for a while have always known this. I am inclined to think this was the reason for the acquisition.

I strongly suspect the primary reason was to buy out the Sage development team, rather than the IP. Sage doesn't have any patents, so the only IP is the SageTV source code. I kind of doubt much of the source code will be directly applicable to whatever Google has planned, meaning that it would be important to get the software developers, so they can rewrite the code for whatever Google has in mind.

[sleonard]

Talent is for sure at least one of the reasons for the acquisition. Just look at Narflex's signature in any of his posts since the merger.

S

[heatvent]

I think in this case talent and IP may be somewhat unseparable. Although I am guessing Google insisted on owning the source code.

[Tomahawk51]

For what it's worth:

I work in an IT organization for a fortune 50 and was actively involved in pre-merger and post merger activities related to business supporting solutions and business/solution architecture roadmaps.

Google is a company built on the most robust platform in the world, and they meticulously maintain that platform and have a managed plan for where it's going. I believe that this acquisition plays a directly role in complementing the platform (e.g. GoogleTV, Android, etc.) and that we can expect SageTV technology/thinking to contribute in however small or large a way. I don't think we'll see the capabilities we value in SageTV materialize in a palatable way in the next 2-3 years.

With that said, I personally am not anticipating to see a PVR replacement before the presumed 1 yr window is up (possibly never). I think I'll be (and all of us) will be in the boat of looking at extending solutions or alternatives. I think we can expect some acceleration of Google's roadmap milestones, maybe, but GSageTV 8.0 is not going to happen.

So I guess I'll keep an eye on where the tribe goes and hope it makes sense to follow. I also hope to be wrong on this, as a happy customer so far.