Lawson Software (LWSN) has announced that it has acquired the Product Livecycle Management (PLM) software division from FreeBorders.  This move apparently will allow Freeborders to focus on it’s outsourcing business as a pure play operation.  Terms of the deal were not announced.

This seems like a no-brainer for Freeborders.  Running a software product company is a completely different discipline from successfully building an outsourcing company.  Beyond the distraction of trying to keep both moving forward, you’ll face the inevitable questions about conflicts of interest, including:

• “Do customers of your software product get preferential treatment from the outsourcing group?”
• “If there is a resource squeeze, which side of the business gets a break?”
• “Are you really serious about outsourcing, or is this just a service component to your product offering?”

From the time that I first met Freeborders, I thought that their product business was a possible weak link in their story.  This move clearly shows that Freeborders is serious about their outsourcing business and that their new management is making changes to the company that will allow them to compete even more effectively.  We should all keep a close watch on this organization.

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