Growth through acquisition is a pretty workable model. Especially when you cut the resulting companies to the bone and basically put their product on life support.
For products used by big enterprises its pretty amazing how long a product can go without meaningful updates and still have companies paying for maintenance. I've seen it a few times now, the engineering/testing is basically cut to one developer who's job is basically to fix bugs and nothing else. For many enterprises this is a pretty decent model. In many cases they don't need or want new features, and the IT guys are very happy if they just get a point release once or twice a year that is a 100% drop in replacement with some bugs fixed.
For a large conglomerate that can sell new licenses as part of a bundle deal, its a good plan to, the customer base grows at about the same rate as people drop the products. The result is just a constant cash flow with basically no overhead.
Exactly my thoughts as well! The average update to a product I use regularly is strongly negative. If I'm already using it that means that it mostly does what I need it to. Constant updates are far more likely to change or degrade existing functionality and/or add bloat that slows performance or clutters the UI, than they are to improve something that already works.
I strongly agree! I really like the idea of a "finished" product that doesn't keep adding new features and growing the team just because they took too much funding and need to find more ways to grow. This is kind of product I'm trying to build with my startup [1]. (I did take some funding from Earnest Capital, but this was just to help with my personal living expenses and pay for a few larger projects.)
Reminds me of how this has not worked - for Mint.com. It was cool when it first came out, got acquired by intuit and now is an old, kinda useless app that was never updated.
I think many companies built around one successful product will hit that point in their lifecycle... where putting more work into perfecting and improving the product provides diminishing returns, but there is a solid demand for the current version of the product.
At that point, it is absolutely the best thing to get rid of everyone and just keep selling the product you have. Too often a company tries to hold on to long, adding new features that don't actually improve anything.
I wish more companies were willing to admit when they reached that point.
A lot of companies try to pivot using the core product as income to find the next big win, with varying levels of success.
But, yes your right at some point you have to admit your product is mature, and cut the engineering effort on that product, hopefully before you start driving customers away.
It's probably not a terrible business model in some regards. However, as a software engineer there - it was miserable. Compensation was crap too. I wouldn't recommend it as a place to work unless you're high up. I think those people got $$$.
Yup - this was the CA (Computer Associates) working model for decades. And as further commenters in the thread show, sometimes for enterprises reliably staying the same year after year is a GOOD thing.
For products used by big enterprises its pretty amazing how long a product can go without meaningful updates and still have companies paying for maintenance. I've seen it a few times now, the engineering/testing is basically cut to one developer who's job is basically to fix bugs and nothing else. For many enterprises this is a pretty decent model. In many cases they don't need or want new features, and the IT guys are very happy if they just get a point release once or twice a year that is a 100% drop in replacement with some bugs fixed.
For a large conglomerate that can sell new licenses as part of a bundle deal, its a good plan to, the customer base grows at about the same rate as people drop the products. The result is just a constant cash flow with basically no overhead.