Well, that was fast. Less than two weeks after SolarWinds committed to reviewing its “strategic alternatives,” the review is complete and the alternative chosen. The winning strategy? Go private.

Yesterday, SolarWinds announced that it is being taken private by Silver Lake Partners and Thoma Bravo, two prominent private equity firms. Technically, this is an acquisition. For SolarWinds stockholders – including SolarWinds management – it’s great news that pays $60.10 per share. For SolarWinds customers, the jury is still out.

I don’t have crystal ball, but I’ve been through the “go-private” drill. Under a go-private structure, a company pays out shareholders by raising debt. Servicing the debt becomes the primary focus for management, which is under huge pressure to adhere to the debt covenants. 

The main point is that servicing debt becomes a complete distraction to building and selling software. Another point of distraction is the employee turnover that follows in the wake of such an acquisition. Neither point is good news for SolarWinds customers. 

I worked for a Thoma Bravo company, as the CEO of Embarcadero Technologies. Thoma Bravo is run by good business people. But building software companies to last is not their priority. Instead of thinking about enterprise mobility management, root cause analysis, and enterprise security, they think about wringing out costs, increasing gross margins, sales productivity and growing EBITDA. 

I didn’t see a lot of product innovation from SolarWinds prior to this announcement. Basically, acquisitions were the product development strategy, and it wasn’t very successful. As a private company, SolarWinds will have to rethink that strategy as acquisitions become an unlikely option. 

Again, that all might bode well for the number crunchers expecting a return on investment. But for customers with IT infrastructure to manage, it presents a very real problem as SolarWinds grows deficient in product development. 

At ManageEngine, we’ve built over 75 products for IT professionals. That’s only possible with development commitment and continuity. We invest over 40 percent of our revenue in product development, and the average tenure of ManageEngine product managers is 10 years. The time horizon for a private equity firm to “flip” an investment is three to five years – that’s not conducive to product commitment and continuity.

No doubt, it may take a while for SolarWinds users to feel the full impact of the financial engineering. And certainly, companies can successfully make the transition from public to private. But such companies’ financial concerns remain paramount and typically overshadow products and customers.

As I said last week, acquisitions and going private transactions have become a predictable part of a technology company’s lifecycle – build a product, get funded, and look for an exit. Great for investors, not so much for customers. 

At ManageEngine – and our parent company, Zoho – the corporate strategy is decidedly different. No venture capital, no public offering, and no private equity. Building great software and putting customers first is our only priority. Here today, here tomorrow and long after SolarWinds finds its next home. 

Raj Sabhlok is the president of Zoho Corp., the parent company of Zoho.com and ManageEngine.