16 Sep 2009, Posted by Matthew Reinbold in Tech Clusters,UT, 0 Comments

On Business: Big and Bigger

Two Utah deals this week, separated by an order of magnitude, illustrate what happens when the great go big. The first was the merger of Twelve Horses and Boston’s One to One Interactive. The second was the massive $1.8 billion acquisition of Omniture by Adobe Systems, Inc.

While the suitor in Ominture’s case is surprising the end result is not. Omniture, an analytics company, is a best-in-class behemoth who’s founder had admitted they had outgrown their Orem, UT roots. At last year’s BYU entrepreneurship day Josh James bemoaned the lack of skilled, local executives with experience on par with the challenges they faced. He described how they had to take their recruiting strategy elsewhere to find the talent.

However, Josh is emphatically enamored with Utah. It’s why he refused to move his company – despite the growing pains. It’s also why he made Silicon Slopes effort a personal crusade. For all its faults Silicon Slopes wasn’t about finding media angles to highlight Omniture (at least not completely). It was about recruiting other titans of tech industry to the area.

And now the big have been swallowed by the bigger. It raises a number of interesting questions. Adobe is a San Jose based company employing more than 7,000 people globally. What possible value could they see in keeping Omniture’s pro-Utah pet project ? There will be a number of well-compensated employees coming out of this. Will they have their founder’s same allegiance to the region? Or will they return to wherever they were recruited from to start their own firms? And will the Utah campus slowly dissipate, as Novell’s has over the course of the past decade and a half, when the corporate offices (and decision makers and focus) are a plane flight away?

Then there is the big merging with big to get bigger. On Monday Twelve Horses and a Boston based digital based marketing firm merged (operating under a much more benign yet admittedly SEO friendly ‘One to One Interactive’ moniker). Twelve Horses was a great company well beyond a quirky name. It had a fantastic story. It had a winning crew based in Reno, NV. It also had great leadership growing something special in Salt Lake City. All involved seemed devoted to nurturing a rich ecosystem of community events. I even went so far as to call Steve Spencer, head of the Salt Lake office, an area “patron“.

The people inside remain the same. However, the commitment to the area will wane. It’ll be nothing malicious or intentional. There simply will be little point. With the merger Twelve Horses has ascended into the rarefied air of ‘global company’ (think the mile high club; all the glamor but none of the procreation between the spreadsheets). With clients in Asia and Europe comes the impracticality of managing smaller, local accounts – why spend hours responding to an RFQ in the low five figures when the same time spent can now net seven plus? Why laboriously build relationships at home for every lead when you’re now able to cherry pick from the best assignments anywhere in the country? Why hob-knob with the area freelancers, bloggers, and technorati of dubious merit when the ROI, relative to now available opportunities, is guaranteed to be low?

As they were aggressively attracting the top Utah talent I had hoped that they could serve as a new type of company for others to follow. I wanted them to demonstrate just how an organization can look beyond its own immediate self-interest and actively cultivate complex cultures of mutual collaboration. I thought that, perhaps, their savvy use of social media could be a model for transparency and openness to rally a region’s tech community around.

I realize now how ridiculous it is to have pinned such expectation to them. They did not ask for it and it was unreasonable to have sought it from them. By any conventional measure – deal flow, client prestige, iPhones per developer – they are successes. The deal will bring new press-release worthy opportunities, far-flung challenges, and larger contracts. Twelve Horses’ merger and Omniture’s buyout illustrate exactly what each group is: a business; nothing less and, to my disappointment, nothing more.