My company, Spirent Communications, relies on the strength of our software engineering efforts to expand our $500 million performance analysis and network management solutions business. Our products and services, used to evaluate the performance of broadband and wireless networking devices and satellite navigation technologies, are developed using a mix of proprietary and open source code.
Over time, our customers began asking us to expand the capabilities of our hardware. It didn’t take long for us to realize that the fastest, least expensive way to add functionality is through software. This shift in customer preferences drove us to increase our merger and acquisition (M&A) activity. Our increased efforts to identify the best M&A targets put the focus squarely on software code quality.
As we sought out new companies, we were also on the lookout for efficient, reliable ways to evaluate the quality of these companies’ intellectual property assets. This had always been part of our M&A due diligence process. With software companies especially, we view the intellectual property as the crown jewel in any transaction. Yet, if the architecture isn’t done correctly, we can’t integrate the code from the target company into Spirent’s code base. And as companies’ software code bases grow and become more complex, this due diligence process becomes even more important.
When we come across open source in a target’s code base, it can often be difficult to determine exactly where the code originated and to deduce the status of any licensing obligations associated with that code. Errors in due diligence relating to target companies’ software code can expose potential buyers to legal, operational, and security risks. At Spirent, we discovered this first-hand during a recent potential acquisition.
During one potential deal, it was the Black Duck Code Quality Audit that showed us the flaws in the target’s code. This experience made us realize the value of code quality audits. Now, we never do a transaction without a code quality audit.
We’ve bought startups and we’ve bought more mature businesses, and in every case, we’ve seen the clear value of this approach. Open source code is nearly ubiquitous in our target companies’ code bases, but organizations aren’t necessarily using it correctly.
With the comprehensive code quality audit reports we receive from Black Duck Software, the due diligence process goes faster and more smoothly. We know right away what types of violations exist in the code base, so we can quickly evaluate whether these violations will have a significant impact on the value of the software as an IP asset. Armed with this knowledge, we can develop sound remediation plans—or, if necessary, back out of the deal.
Time to market is critical in our business. Technology evolves quickly, and our engineers are under tremendous pressure to deliver innovative solutions to our customers. The more we know about our acquisition targets and their intellectual property, the faster we can move as a company to advance solutions for our customers.
Please view this case study for more information on Spirent’s success with Black Duck’s Code Quality Audits.