As software finds itself embedded in a variety of manufactured products, from cars to cell phones to other household items, two traditional ALM companies have been acquired by companies with a large interest in the product side of the life cycle.
PTC, a Needham, Mass.-based management solution company, acquired MKS on April 7 for CA$292.5 million in a cash transaction, which amounts to CA$26.20 per share. Also, Rocket Software acquired Aldon on March 22 for an undisclosed amount (as both are privately held).
Both increased their portfolio while mitigating their risk, according to Dave West, a Forrester principal analyst.
“Rocket had a bunch of development tools, but no change management or ALM hub,” he said. “It is interesting that they acquired Aldon to provide that piece.
“PTC’s acquisition of MKS is interesting in several ways as well. Both increase [PTC and Rocket’s] offering without requiring PTC and Rocket to create the offering themselves. It’s complex software to create; this lowers their risk.”
West added that PTC’s acquisition of MKS highlights important factors in the software space, mainly that “software is an important element in many products,” including cars, cell phones and software systems that provide help-desk support. PTC’s products prior to this included software tools for change and configuration management, and portfolio management.
Additionally, West said this shows the importance of an “end-to-end solution.”
“You can’t rely on manual processes or people, particularly if you’re delivering complex software quickly,” he said. “[Companies] need better change control solutions and better visibility.”
West added that building these complex software solutions is hard, particularly for companies that haven’t created them in the past.
PTC president and CEO Jim Heppelmann acknowledged this fact in an announcement of the acquisition. “At PTC, we recognize that software is an essential component of nearly every manufactured product. That’s why we have long believed that the development of product hardware and software should be managed as a unified process.”
PTC’s acquisition will be finished in June, and the company declined to add additional commentary until that point in time. Rocket Aldon’s acquisition is finalized, however, and its business area executive, Daniel Magid, commented on the change.
“Product names remain the same and customers will be dealing with the same staff; Rocket is keeping everyone in place,” he said.
Aldon’s staff, Magid said, now has access to more tools and technologies, such as Rocket’s business intelligence solutions.
Rocket Aldon is trying to integrate business intelligence solutions, and it has been trying to do so for some time, according to Magid. He said the company is currently evaluating which of Rocket’s technologies can be more tightly integrated with the tools Aldon brought into the company.
“For ALM, ideally, business intelligence tools give users access to comprehensive management information for insight into all application development and maintenance activities,” he said.
“Users will be able to view, track, understand and manage all software development data, and generate the reports necessary to help them speed up software delivery, better track progress (people, process and projects), and to simplify compliance. Business intelligence integrations might be along the lines of dashboards, detailed reporting (templates and customizable), graphs, and charts.”
West said that these integrations of technologies might lead to a new life-cycle management classification, called systems life-cycle management (SLM).
“SLM [increases the notion] that software is no longer about the product,” said West. “It’s about an ecosystem of products and solutions. For example, a car with OnStar is not just about the original product [the car]; it’s also about OnStar working, which integrates many systems [like an iPhone, GPS tracking, etc.].”