I worked at IBM from 1995 to 2009. During that time, I had a front-row seat to several significant acquisitions, including Lotus, Rational, Tivoli, and PwC. Now, seeing the news of the $11 billion Confluent acquisition, I have a sense of déjà vu.
On paper, the narrative is convincing: stitching real-time data streaming into a powerful AI and hybrid-cloud stack. But history suggests a familiar (and painful) pattern where the enterprise customer often ends up bearing the cost.
Here is why I’m cautious—and why customers should be too.
1. The “Buy and Fade” Cycle
There is always a wave of optimism when the deal closes. But look at the trajectory of Lotus (acquired in 1995):
High: IBM bought Lotus for its enterprise collaboration capabilities.
Decline: Lotus products lost their leadership over time.
Exit: IBM sold Lotus to HCL in 2018 for just $1.8 billion.
Impact: IBM/Lotus customers were left to support legacy software with reduced support.
2. The Culture Clash
Acquisitions by giants like IBM inevitably disrupt the identity of the acquired firm.
Employees used to agility often struggle with a “stodgy” corporate culture.
Once retention incentives expire, talent exodus is common.
Without key employees, product vitality fades and innovation stalls.
3. Shifting Priorities
IBM often acquires to bulk up its portfolio. Confluent follows Red Hat (2019) and HashiCorp (2024). However, investment is frequently reallocated to the next strategic shift rather than sustained long-term commitment. This leaves customers stranded while still paying maintenance fees.
What should you do?
Investors: Look beyond the “AI-ready” headline. Real delivery depends on cultural integration and long-term support.
Developers: Watch the open-source commitment. Both HashiCorp and Confluent have a history of moving away from being truly open-source.
Customers: Demand explicit commitments to support and transparent road maps now, before the dust settles.
The Verdict
While IBM’s acquisition of Red Hat has been highly successful, the history of assets like Lotus suggests everyone should be skeptical. The entire ecosystem risks collateral damage unless IBM treats Confluent as a genuine long-term investment.