August is considered a slow month in many industries. This wasn't the case, however, in insurance technology. Within a mere seven days, for example, news releases arrived regarding three substantial industry solution providers being bought by three other even more substantial solution providers, which got me thinking about the further-reaching meaning of such deals. On the 10th, ISO announced its acquisition of Xactware, and ChoicePoint touted its purchase of Steel Card (after scooping up ePolicy in July). On the 17th, Accenture agreed to buy NaviSys. While these transactions are significant in themselves and to both the combined companies and affected customers, in the broad scheme, adept CIOs need to consider how to assess and leverage for their own benefit what promises to be an ongoing trend.

Buyers in any industry are looking to improve their financial viability, extend their footprints, and realize economies of scale. They want to acquire customers and build more business. Usually, however, announcements of this kind also refer to increased value for the customer–but that really is for the customer to decide (for more on managing vendor risk, see "Close Inspection"). Personally, I've benefited and I've lost out. My bank has been gobbled up many times over, and I've gained access to broader (and sometimes better) services–I'm sure not an uncommon experience nowadays. On the other hand, a costume jewelry manufacturer I frequently purchased items from had offered repair–if the product eventually broke or tarnished, the company fixed or replaced it gratis. Then the company was bought by a larger outfit that closed the manufacturer's U.S. presence and eliminated the repair service, so I'm no longer the enthusiastic customer I formerly was.

With big bucks at stake in technology, there's much more to evaluate. For starters, an acquiring company may be a recognized brand, or it may be unknown. The transaction could involve one software company buying another (and then it's important to know who owns the buyer), or it could involve private equity (i.e., investors who might not know technology, want to sell in a few years, or find expense reduction more important than long-term investment). Even if the buyer is "world class," what does that mean for a customer in real terms?