Interviews Pumatech and Synchrologic Executives
Acquisition of Synchrologic by Pumatech
Said Mohammadioun, CEO of
Sychrologic and Clyde Foster, Senior Vice President of Sales and
Marketing of Pumatech on September 30, 2003
Note: The answers have been paraphrased by MobileInfo.Com's Managing Editor but do capture the essential points made by Pumatech and Synchrologic executives during the interview.
Please give us an overview of the acquisition from your individual - Pumatech & Synchrologic perspectives. Give us three most important factors that led to the merger between Synchrologic and Pumatech.
Both companies are excited with the potential of this merger. We felt that the timing was important for us to form a company that would have a broader reach in the consumer retail, OEM and the enterprise markets. Market is seeing more traction in mobile synchronization space and large enterprises are concerned as to who will emerge as the leader that will not go away. Pumatech developed the original synchronization technology but found itself competing with Synchrologic very often. Pumatech also recognized that Synchrologic had a superior mobile server product for the enterprise that can serve the needs of enterprises with 10,000 to 30,000 users, even though they may have deployed mobile applications to a much smaller number of users presently. Therefore, Pumatech moved quickly to acquire Synchrologic.
Synchrologic did not have a product to compete with Pumatech in the retail market. The merger sends a clear signal that the merged company will lead the synchronization market in terms of enterprise segment. It will accelerate our growth. We wanted to create a significant distance (gap) between ourselves and the second company - that happens to be Extended Systems.
How big will the combined company become in 2004 from revenue, employees and customers perspectives?
Our combined annual revenue will be $37 million. We shall have 200 employees and reach over 66% of Fortune 500 enterprises.
Pumatech is already a recognized leader in the retail market with its Intellisync product. Our synchronization engine is used under the cover in many OEM products.
Besides, Synchrologic, Pumatech acquired two other companies - Spontec and Starfish from Motorola. What is your game plan and how are you filling up product holes in your desire to provide a more complete solution to your customers?
Pumatech has been moving actively during 2003 in terms of consolidating its position in the market. Besides Synchrologic, we made following three acquisitions during 2003:
Starfish (from Motorola), which has a strong SyncML-based synchronization product that is attractive to carriers who must interface with a variety of handheld platforms.
Spontaneous Technology (Spontec), which is a leading provider of secure, carrier-grade enterprise VPN solutions that extend existing corporate applications to any wireless device and operating system, including Microsoft (NT & Pocket PC), SUN (Solaris, Java, J2ME).
Loudfire, specializing in real-time remote information access
The acquisition of Synchrologic on the heels of Pumatech's acquisition of Starfish Software, and the acquisition of the assets of both Loudfire, Inc. and Spontaneous Technology, Inc. (SponTec) completes our strategy to consolidate our position in the synchronization arena as well as to extend our customer reach to small and large enterprises, including carriers who have unique synchronization requirements. After successful completion of these acquisitions and the integration of these assets, Pumatech's product family will comprise Intellisync technology for desktop-based synchronization, Synchrologic technology for server-based synchronization and device management, TrueSync (Starfish) server-based technology for the carrier market, Loudfire technology for real-time remote information access, and SponTec technology for secure VPN solutions. Pumatech's Satellite Forms® MobileApp Designer software will continue to provide a platform for rapid development of custom mobile applications.
Pumatech was the first company with handheld synchronization effort. We have watched Pumatech since it was a startup. It remained in the consumer (and OEM market, which has been slow to come along. In future, it might be big. Synchrologic is a bit younger but more energetic with a marketing polish and acceptance in the enterprise? Can you elaborate on the synergy and strategy of "filling up of holes" in this acquisition?
Pumatech was successful in the retail channel with its Intellisync desktop synchronization solution. But to succeed in the enterprise, it needed equally strong server-based product. Synchrologic has developed a successful product for the enterprise. Bringing the two products together under one corporate umbrella would give us a wider market reach, especially in the enterprise - a market that is ready to expand significantly. In the enterprise, you may start off with only hundreds of seats initially but can expand that base to thousands very quickly.
Can you paint a future picture of the combined organization in the next five years - in terms of the following metrics: revenue, number of people, products and importance of customer-vendor relationship?
It is difficult to project our vision to five years because market is still fluid and we expect more shake down among vendors in that time frame. However, we do intend to be a strong synchronization player in the short term (one to two years). We would like our product to be a component technology within architectural notion of mobile application servers. Vendors like IBM do use Puma engine in their WebSphere platform and in other cases, our product sits besides an application server.
The most important vendor in the enterprise is the mobile business strategy consultant, systems integrator or application developer. This vendor influences greatly the components that comprise a complete end-to-end solution. How does Synchrologic/Pumatech intend to market to this group?
Do you intend to aggressively influence the IT mobile strategy planner in the enterprise?
Pumatech is primarily a software product development company and not a large professional services company like IBM global Services, EDS, Cap Gemini, Accenture or HP. We intend to forge strong relationship with these systems integration and professional services vendors..
From product perspective, Pumatech does address application development for simple mobile applications for SME (small & medium enterprises). The larger enterprises have application servers like IBM's WebSphere standalone or embedded in their database offerings - like Oracle. How do you offer synchronization in these situations?
As stated earlier, we can be component within application servers or co-exist besides these application servers providing synchronization functionality to mobile users. Through our Starfish SyncML product, we intend to reach carriers who may offer these services to their clients.
From product perspective, you have a challenge to merge the product lines in order to appear as those coming from a merged company. Do you expect the user interfaces of Intellisync and Synchrologic Mobile Suite and the guts of your synchronization engines to become similar, so that both the users and IT professionals find it easy to migrate from a consumer perspective to an enterprise user perspective.
While it would be nice, we intend to leave the user interface intact for the time being. Over the course of time, it may evolve. In fact, user interface can be hidden within the application.
Could asset management take a back seat in the merged organization?
No, asset management is important in its own right. We are focusing on synchronization for the time being.
Rationalization in our industry has just started. Is your business strategy to grow and stay on your own or you expect to be acquired further?
Our strategy is to grow our revenue in the near term and become profitable so that we can sustain our growth. We do not need infusion of external capital.
We do expect that larger players will become interested in this space and that will include carriers
as well. We hope we have a good solution for both the enterprise and carriers.
Who are your major competitors? How would the merged company stack up against Extended Systems, XcelleNet? From product, financial standing and customer acceptance points of view?
Our major competitors are Extended Systems Incorporated (ESI) and iAnywhere. XcelleNet is certainly a competitor. In the carrier space, we find Seven as our competitor.
MobileInfo Comments and Advisory: Pumatech developed the desktop synchronization engine during late 1990s - primarily for PIM content that was dispersed on handheld devices and desktops but was not always synchronized. Pumatech amassed good deal of expertise and intellectual property (IP) through a series of patents during the next few years. Nonetheless, its synchronization expertise was centered around the desktop. However, as e-mail and contact information became shared across the workgroups in the enterprise, there was a need to move this information off from personal desktops to servers. That is when Synchrologic, ESI (Extended Systems) and iAnywhere developed server-based products for the enterprise. Pumatech tried to protect its IP through a number of lawsuits against Synchrologic and ESI. Without commenting on the validity of these IP-related claims, Synchrologic was under pressure to either defend its products against such claims or pay a royalty to Pumatech. Instead, it made a business decision and decided to be acquired by Pumatech for $60 million worth of stock.
We think that the synchronization market is still relatively small and long-term survival of many of these companies is still doubtful. Therefore, this is a prudent and wise business decision on the part of both companies. Because its background was primarily in the retail desktop arena, Pumatech did not fully appreciate the concerns and requirements of IT professionals in large enterprises. It could make OEM deals with other software product developers but IT professionals in the enterprise speak a different language of super servers, mainframes, application servers, inter-operability, technical support, systems management, version control and keeping application versions synchronized across a large network (not just between a single device and a single desktop). This is where Synchrologic excelled in the market and that's what Pumatech found attractive in Synchrologic. Avoiding a potentially long-drawn IP litigation where interim judgment has not been favorable to Pumatech demonstrates a business maturity on the part of the two companies. These disputes benefit nobody except the lawyers.
In the context of end-to-end mobile application solutions, synchronization is a component technology. Its value is significantly enhanced with application development tools. Pumatech's Satellite Forms product is a pretty good platform for SME (small to medium enterprises) customers. However, it must find a better entry into more complex application development environments that large enterprises have. We would suggest that Pumatech should enhance this tool to interface with these environments.
We also find Pumatech's other three acquisitions (Starfish, Spontec and Loudfire) very important. Long term potential in the carrier market, which undoubtedly has faced tremendous problems, cannot be ignored. With these product tools and enterprise discipline from Synchrologic, Pumatech has a serious proposition for these carriers. Nokia's recent entry of NAM (Nokia Access Mobilizer) will enlarge that market. Pumatech does have the building blocks of a TPAM (Third Party Access Mobilizer - our deviation of Nokia's NAM terminology). We can easily conceptualize Pumatech being able to put together a PAM (Pumatech Access Mobilizer). While NAM will provide superior support for Nokia handsets, Pumatech may mke PAM a general-purpose access mobilizer. Perhaps, Pumatech has that in mind already.
We think that the merged company will be in a better position to stand on its own and fight competition from Extended Systems and iAnywhere in the enterprise and strengthen its position in the carrier market.
To summarize, acquisition of Synchrologic by Pumatech is good for the two companies and also for those customers who have deployed their technologies. It will ensure that the combined company or its products will survive the inevitable rationalization in the mobile computing market. On the whole, we find Pumatech's acquisition strategy quite cohesive.
MobileInfo.Com thanks Said Mohammadioun, CEO of
Sychrologic and Clyde Foster, Senior Vic President of Sale and
Marketing for this interview.
For more information on Puma's
acquisition of Synchrologic, click
here. For frequently asked questions on this acquisition, go
here. For Puma's acquisition of Starfish, go to Pumatech
announcement. For Spontec
acquisition and Loudfire
acquisitions, go to Puma's press releases on its website.
To go to Synchrologic website for
synchronization solution for the enterprise, click
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