Mergers and Acquisitions and Tech Challenges

Earlier this week; Facebook, Instagram and WhatsApp suffered a lengthy outage. Users reported they were not able to use services offered by social media giant for hours. Official Facebook statement puts outage duration around 2.5 hours. What’s very interesting and significant about this outage is it affected 3 different platforms. Reason behind this is, Facebook is working on consolidating technology that drives those 3 different platforms.

This is first time, different social media platforms used by same parent company have suffered such a massive outage. However these outages are bit more common across Banks (especially in UK). In September 2018, British Royal Bank of Scotland and NatWest suffered an outage. Both these brands are owned by same parent company. Earlier this year in January, Lloyd’s, Bank of Scotland and Halifax owned by Lloyd’s Banking group suffered an outage impacting “Faster Payment” service.

Comparing social media and main street bank’s outage is probably the best example of comparing Apples and Oranges. Social media outages won’t have as much “impact” as bank outage does. When bank(s) have an outage, people’s financial life is messed up. One could argue, due to outage customer may not have been able to use P2P fund transfer services offered by Facebook or WhatsApp (so there could be financial impact as well). When British banks suffered these outages, regulators have come down on them very heavily. Based on explanation of outage offered (so far), I don’t anticipate Facebook would face that much scrutiny. When Banks suffer outages, inevitably finger is pointed at “legacy” technologies banks use. Then question of why banks don’t modernise their technology comes up far too often.

Typical Banking application (most of legacy ones) use 3 tier architecture. They have 3 different layers each performing distinct function. First one is for presentation, then second for business processing logic / middleware and then finally for database / data storage. On other hand, Facebook uses micro services based architecture. Technology stack used by social media sites is as current as it gets (I wonder how many Facebook, WhatsApp or Instagram developers have worked on technology like COBOL).

Despite these stark contrast in pretty much every aspect, there is something which is common across Facebook and big bank’s outage. When different companies who come together after merger and acquisition (M&A), consolidating underlying technology platforms is very complex and challenging process.

One could ask why there is a need to consolidate the platforms. The answer to that question is very simple. Consolidation results in cost savings. If applications are not consolidated, to offer similar features / functions, things need to be developed, tested and deployed across multiple technology platforms. That results in more expenses. For example, when “stories” feature was launched, Facebook and Instagram platforms were different. So they had develop them separately. Also with different platforms, running these platforms may require different staff members. So manpower cost also increases too.

During my modest technology career, I’ve worked on “few” consolidation projects that happen after M&A activity. These projects are often challenging and demanding due to visibility they attract. Despite best of planning and efforts, there are always bumps in the road. What matters most is how quickly you can recover from these. That essentially defines if project is deemed successful or not…