Is Consolidation Killing Innovation?

July 22, 2009: 8:00 AM ET

The shrinking of the tech sector threatens creativity and new thinking

By Christopher Lochhead, strategy advisor and former chief marketing officer, Mercury Interactive

Is Silicon Valley at risk of becoming Detroit 2.0 -- a company town dominated by a handful of big, uninspired conglomerates?

Lochhead advocates a healthy mix of innovation and consolidation

Lochhead advocates a mix of innovation and consolidation

Consolidation is replacing innovation as the hot strategy. During his company's battle for PeopleSoft, Oracle CEO Larry Ellison declared that the software industry has entered  a "period of contraction and consolidation."  

Talk about a self-fulfilling prophesy: Oracle has gobbled up at least a dozen more companies since it closed the PeopleSoft deal in 2005, and a big purchase of Sun Microsystems is pending. And other companies widely are expected to follow Oracle's acquisitive ways.


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