Eye on M&A

CollabNet's latest buy involves more than meets the eye

Open-source merger takes a business view

CollabNet Inc.’s recent purchase of Danube Technologies Inc. for an undisclosed sum might appear straightforward: In the market’s near-tidal pull toward consolidation, a market-leading software development platform maker buys a smaller software development tool maker. Story over.

But a peek under the surface reveals something intrinsically subversive — in a good way — about this deal, something that wants to reach far beyond the arcane world of coding and sink conventional management practices that “are so pervasive that it’s difficult to appreciate their harm until one has experienced life without them,” said CollabNet software process mentor Michael James in “Better Software" magazine.

But let’s back up a little. Co-founded by Apache Software Foundation co-founder Brian Behlendorf, CollabNet has more than 5 million users for its initial product, version-control system Subversion.

Its flagship, TeamForge, which is a Web platform for cradle-to-grave collaborative application life cycle management, is the basis for the Defense Information Systems Agency’s cloud-based — and award-winning — Forge.mil for agile software development. “More than 4,000 users working on nearly 200 projects are already realizing significant development efficiencies,” said CollabNet CEO Bill Portelli.

In TeamForge Version 5.3, released in December 2009, self-described process agnostic CollabNet took its first steps toward built-in support for agile software development, which has become the most used application development process, said Dave West, senior analyst at Forrester Inc.

Agile software development relies on cross-functional teams that work iteratively and quickly. One criticism of the technique is that it delivers good code only when practiced by good coders. However, that truism is applicable to any field rather than a valid criticism of the process, West said.

One unproven allegation against agile development projects is that because standard accounting methods don't easily track processes, the projects tend to go over budget, he said.

“In fact, we find the exact opposite is true” because the process is iterative, with status reviews occurring usually at least monthly, West said. In a Forrester survey of about 2,000 companies, “we found that agile was used by 36 percent. The commonest method after agile was no process at all; that was 30 percent.”

Of the surveyed enterprises that use agile, West said, more than a third were using Scrum, the agile process supported by CollabNet’s newest purchase, Danube, and its flagship ScrumWorks project management tool.

Scrum teams, a nine-member cross-functional group, meet daily with the goal of producing a working iteration at the end of each two-week sprint.

The chaos of those meetings is real and unavoidable, West said. “The early stages of software development are necessarily very creative; there’s a lot of input from a lot of different stakeholders, and it is chaotic,” he said. “But you can’t break that part of the process down into atomic units. It doesn’t work that way.”

For CollabNet/Danube — and the soon to be TeamForge/ScrumWorks — how it does work entails no guessing. “Danube has the largest number of on-staff Certified Scrum Trainers in the world,” CollabNet’s Portelli blogged.

Danube lays claim to about 150,000 ScrumWorks users. It also has “more Scrum Masters than any similar company I know of,” West said.

“This is an interesting acquisition because CollabNet has been a strong platform for managing software development projects, and now it has a lot more details with ScrumWorks.”

But back to the part about sinking old human resources management practices. “Courageously applied, Scrum’s relentless ‘inspect-and-adapt’ cycles lead to change beyond our software development practices,” Danube’s James writes.

Too many HR theories are based on early behavioral psychology research using rats, he said. “For complex work, this punishment-and-reward game harms performance, even from rats.”

“Studies of human motivation reveal typical practices, such as micromanagement and performance appraisals, are counterproductive in the long run,” he writes. “To make Scrum work, a business gives up these illusions of control in order to gain greater influence.”

Extrapolating and applying Scrum team tenets to the organization as a whole will not only yield better software, he summarizes, but also an extraordinary organization.

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