The last several months have seen four significant changes in the ISV community that is supporting the IBM System i: Vision Solutions was bought by Thoma Cressey Equity Partners; Help/Systems purchased Advanced Systems Concepts (ASC); Unicom Systems acquired SoftLanding Systems; and, in a unique consolidation move, the newly acquired Vision Solutions bought competitor iTera.
What do these acquisitions mean to the System i community? Will these purchases and consolidations weaken customers' ability to find competitive business solutions for the System i? Or does the influx of new capital into the vendor community validate IBM's vision of longevity for the System i?
It's important for management to understand the implications of these acquisitions. But just as important is what these purchases do for the particular sectors these vendors market in and how these changes position the System i for the future.
IBM's Grand Plan for the System i
IBM's Mark Shearer has said that it's vital for the longevity of the System i to have a vibrant ISV tools marketplace. After all, without good software solutions, no operating system platform can stand up against the behemoth of Microsoft for long. With this in mind, Rochester has opened the doors to vendors and ISVs to once again attempt to attract new applications to the platform. In addition, there have been new initiatives to educate university Computer Science departments about the platform and to foster new technical talent in the development environment.
These have both been good strategic moves: 3Com has introduced a port of its VOIP solution for the System i, Zend has ported its PHP scripting environment to the platform, and universities around the country are creating new curriculums that provide students with real exposure to the platform, a platform that academic Computer Science departments termed "obsolete" in the past.
Low-End/High-End Implications for Customers
For the customers on the low end of the System i, these initiatives don't necessarily offer a lot of immediate or practical traction within management. After all, Microsoft Vista will begin to ship to some customers at the end of this month, and the media attention has been primarily focused on how customers will implement the new Microsoft operating system. Never mind that Microsoft's new environment requires major capital reinvestment by IT and untold man-hours to roll out capabilities that don't really address pressing business goals. Yet Microsoft has the spotlight, and the SMB market is currently caught like a deer in the headlights, trying to figure out what Vista will mean to it.
But IBM's System i initiatives have caught the attention of another sector of the SMB market—the medium-to-high-end market segment, where the business platform choices in the past have clustered around UNIX and mainframe operating systems. The big questions and problems facing these organizations are not issues with Microsoft, but issues facing the affordability of SMB solutions. For these vendors and customers, the System i offers fantastic opportunities to expand their reach into the SMB market without sacrificing the elements that have made UNIX and mainframe environments so successful: flexibility, scalability, reliability, and security. In addition, IBM's long-term commitment to the platform is seen to reduce the risk that these investors will incur as they transition their organizations in the SMB.
New Money and New Opportunities
So who are these organizations that are bringing new money into the System i environment? Are they gobbling up competitors and consolidating market share to the disadvantage of current System i customers? Or are they infusing the market with new opportunities? Let's briefly look at the portfolios of each parent company to see where we'll stand after the smoke clears.
Thoma Cressey Equity Partners Makes a Sure Bet
Thoma Cressey Equity Partners is a well-known investment organization that has been around for more than 15 years. Thoma Cressey has a strategy to "buy and build" organizations it acquires by working closely with a limited number of companies with outstanding growth prospects.
This would certainly include the high availability (HA) companies of Vision Solutions and iTera, both of which Thoma Cressey acquired within the past couple of months. In 2006, HA was IBM's hottest product sector in the System i, prompting Rochester to release new models and capacities that are extremely cost-effective, lowering the threshold at which SMB customers can obtain peace of mind.
Thoma Cressey also has investments in other companies that provide significant software, mostly in the mainframe environment, including these:
- Activant Solutions, Inc.—A leading technology provider of business management solutions, serving small and medium-sized retail and wholesale distribution businesses in three primary vertical markets: hardlines and lumber, wholesale distribution, and the automotive parts aftermarket
- Attachmate Corporation—The largest independent provider of access and integration software for legacy systems
- NetIQ Corporation—A provider of integrated systems and security management solutions
- JDA Software Group, Inc.—A software group that assists more than 5,500 retail, manufacturing, and wholesale-distribution customers in more than 60 countries achieve demand-chain results
- Made2Manage Systems, Inc.—A provider of enterprise resource planning (ERP) software for manufacturers across multiple manufacturing industries, with more than 2,100 customers worldwide
- Datatel, Inc.—A provider of integrated enterprise information management software solutions to more than 600 colleges, universities, and other higher-education institutions serving almost 4 million students
With the acquisition of both Vision Solutions and iTera, Thoma Cressey is injecting capital into the SMB marketplace exactly at the place where the System i will make its mark. Vision estimates that there are only about 6,000 full installations of HA in the System i environment today, leaving a great opportunity for market penetration in the estimated 250,000 installations of the platform. Vision Solutions will focus on the global market, where it has already established its sales channels. iTera will continue to focus on the U.S. domestic market, where it has had phenomenal success.
Help/Systems Acquires ASC
Help/Systems, Inc. has been in our marketplace since 1982, for as long as there has been an IBM midrange. The company is one of the most highly trusted tool ISVs on the System i today, and its motto, "We will always be here for the System i," underscores its firm commitment to the platform. And why shouldn't the company be committed? Its "Robot" line of operations automation tools designed specifically for the IBM System i has one of the most loyal followings in the industry, receiving high ratings from system operators in the U.S. domestic market.
Advanced Systems Concepts (ASC), which Help/Systems has acquired, itself has a treasure trove of tools that help IT bring the System i data assets to the front office. This product line includes its SEQUEL data access and analysis tool and its Report Edit Utility for generating reports. ASC also has its own group of operations utility programs as well as the highly productive RIO modernization tool that converts RPG into C++ or Java classes. Most importantly, ASC has a robust list of business partners, both in the U.S. domestic market and worldwide.
The consolidation of these two System i tool vendors will greatly expand Help/Systems' profile on the global market, while nicely complementing the entire product line of both organizations. The challenge for Help/Systems' marketing department will be supporting the combined brand image in the fast-moving global SMB marketplace, where the visibility of traditional System i tools will be challenged by newer "upstart" vendors that are embracing the platform.
UNICOM Systems and SoftLanding Systems
SoftLanding Systems is another tools ISV that has a long history with the System i. It's been building change management tools for the midrange market since 1989, and its products include, among others, TurnOver Change Management, ExpressDesk IT Issue Tracking, Deploy/400 Deployment Tool, and TestBench Testing Environment. Its specialty in software management has earned it enormous respect, and its team of professionals is one of the best in the industry.
No doubt, this reputation is what attracted UNICOM Systems, which purchased SoftLanding in September. UNICOM Systems is a mainframe software organization with special focus on enterprise-level CICS solutions.
"We understand the stability and longevity OS/400 will enjoy, and [we] see many opportunities for growth," said Corry Hong, President and CEO of UNICOM. "We were very impressed by SoftLanding's technology, particularly their Eclipse-based work. We look forward to bringing our experience and financial fortitude to bear in helping SoftLanding increase its dominance in the application lifecycle management sector."
However, the challenge for UNICOM Systems and SoftLanding Systems will be meshing mainframe management and organizational styles with SoftLanding's "turn-on-a-dime" team. Two differing corporate cultures must coalesce to ensure continuity to the customer base in the coming year.
Nonetheless, UNICOM Systems is well-positioned to take advantages of SoftLanding's excellent technology and reputation on the IBM System i. Said Hong, "Our strategy is to expand UNICOM by applying our successful model to new markets. We were looking for a stable company in the System i market with proven growth potential, good management infrastructure, and dedication to its existing customer base. We found that in SoftLanding."
How ISV Acquisitions Change the System i Landscape
On the surface of things, the changing landscape of System i ISVs represents a maturing of the System i tools market: The products will remain and will no doubt continue to be enhanced to provide new value. And the influx of new capital by large external players is a testimony to IBM's efforts to assure the ISVs and customers that the System i has many more productive years ahead. This is the good news.
But this maturing and stable System i market isn't enough to ensure that there will be future investments by new ISVs with new products. What we are witnessing instead is, generally, larger organizations taking advantage of a proven platform into which they can safely invest money, continue growth, and capture new customers for their other products or services.
Why can't we see the same new investments that other platforms see?
One of the obstacles facing ISVs nurtured on other operating system platforms is that the System i already arrives from the manufacturer with a lot of utility tools and integrated services in place. It's only when extraordinary new technical requirements arrive in the SMB marketplace that new business needs fertilize the imaginations of System i tool vendors.
Consider how this dynamic is significantly different from how Microsoft's and other vendors' operating system platforms fuel ISV tool development. In those OS markets, it's often the flaws in the base product—flaws in security, flaws in productivity enhancements, etc.—that drive ISVs into creative frenzies that result in new products and services. And since there is no status quo for those platforms—no expectation of quality or business usability—identifying new opportunities for improvements becomes a marketing bazaar for burgeoning ISV development teams.
Gold Standards
Now consider the System i. For years, IBM has marketed the System i's integrated flexibility and stability, complete with its own integrated tools. In the System i world, the tools that ISVs have built and supported have traditionally taken the platform to the next level of value: High availability ISVs have leveraged System i's extraordinarily robust hardware platform, change management ISVs have leveraged System i's resilient and evolving application development environments, systems operations tools ISVs have piggybacked on System i's comprehensive operating system services. They have taken elements of the System i that are "good" and added a new level of value and productivity.
And though there is always room for improvement and new technology, the fact is that, for business, the System i itself is already a gold standard for business computing.
With this in mind, we applaud the wisdom of the new owners of these trusted brands and products, and we welcome them onto the System i platform. It's clear that they recognize the opportunities for growth, and it's clear that the System i is the best opportunity for longevity and customer satisfaction.
Thomas M. Stockwell is Editor in Chief of MC Press.
More than ever, there is a demand for IT to deliver innovation. Your IBM i has been an essential part of your business operations for years. However, your organization may struggle to maintain the current system and implement new projects. The thousands of customers we've worked with and surveyed state that expectations regarding the digital footprint and vision of the company are not aligned with the current IT environment.
TRY the one package that solves all your document design and printing challenges on all your platforms. Produce bar code labels, electronic forms, ad hoc reports, and RFID tags – without programming! MarkMagic is the only document design and print solution that combines report writing, WYSIWYG label and forms design, and conditional printing in one integrated product. Make sure your data survives when catastrophe hits. Request your trial now! Request Now.
Forms of ransomware has been around for over 30 years, and with more and more organizations suffering attacks each year, it continues to endure. What has made ransomware such a durable threat and what is the best way to combat it? In order to prevent ransomware, organizations must first understand how it works.
Disaster protection is vital to every business. Yet, it often consists of patched together procedures that are prone to error. From automatic backups to data encryption to media management, Robot automates the routine (yet often complex) tasks of iSeries backup and recovery, saving you time and money and making the process safer and more reliable. Automate your backups with the Robot Backup and Recovery Solution. Key features include:
Business users want new applications now. Market and regulatory pressures require faster application updates and delivery into production. Your IBM i developers may be approaching retirement, and you see no sure way to fill their positions with experienced developers. In addition, you may be caught between maintaining your existing applications and the uncertainty of moving to something new.
IT managers hoping to find new IBM i talent are discovering that the pool of experienced RPG programmers and operators or administrators with intimate knowledge of the operating system and the applications that run on it is small. This begs the question: How will you manage the platform that supports such a big part of your business? This guide offers strategies and software suggestions to help you plan IT staffing and resources and smooth the transition after your AS/400 talent retires. Read on to learn:
LATEST COMMENTS
MC Press Online