As any long-time observer of the IBM i can tell you, a significant feature of its market over its recent history has been the consolidation of companies offering software and other solutions to the user base.
HelpSystems, a Minnesota-based company that started out specializing in automated operations solutions for IBM i, has been part of the consolidation movement. HelpSystems acquired security experts The PowerTech Group in 2008, Safestone in 2012, and SkyView Partners in 2015. Also, HelpSystems bought document management solution provider RJS Software Systems in 2014 and systems management specialist Halcyon Software in 2015, as well as both file-transfer and encryption vendor Linoma Software and server-monitoring solution provider Tango/04 Computing Group earlier this year, although many of these companies offer non-IBM i products as well. The company purchased IBM's business intelligence portfolio ShowCase in 2013 and the RODIN suite from Coglin Mill in 2014. In addition, HelpSystems bought Windows workflow software provider Network Automation (AutoMate) in 2014, Windows/Linux-based network monitoring company Dartware (InterMapper) in 2013, and Armenia-based outsourcing service company Sourcio in 2016.
HelpSystems' CEO Chris Heim and Executive Vice President for Technical Solutions Tom Huntington recently took time to answer some questions about this and other issues facing the IBM i market.
IBM i Is Still a Thousand-Vendor Market
"We have played a tiny role in the consolidation of software sources in the IBM i market," Heim modestly points out. "HelpSystems has bought fewer than 10 vendors. According to some industry sources, there were as many as 8,000 software vendors for the IBM i at its peak. Today, some estimates put that number around 1,000."
Nevertheless, despite its small role in the consolidation movement, HelpSystems sees that change as beneficial.
"We believe that both the long-term and short impact effect of multiple vendor acquisitions by HelpSystems and other companies is healthy. The IBM i market is unique, and many of the founders of IBM i software companies are reaching retirement age," Heim notes. "When HelpSystems acquires these companies, their customers are assured that their products will continue to be enhanced, supported, and sold both now and in the future, and we have ten years of experience on some of the products demonstrating this fact.
"Our customers also have strategies within their companies to reduce their overall number of vendors and want to see solutions integrated together. Acquisitions enable customers to consolidate vendors and see integrated solutions that can accomplish things collectively that individual products cannot.
"Finally, exits are good for a market. If entrepreneurs see a market where you can create a great product and company and then later sell it for a profit, they are apt to invest in new companies in the space. If you never have exits, you will not see new investment flow into a market," Heim concludes.
Outside Funding May Also Help the i Market
In keeping with the idea of new investment flows to the i market, HelpSystems itself was acquired by investment firm H.I.G. Capital in October 2015. Heim and Huntington stress that the purchase will result in no changes to HelpSystems' strategy or outlook.
"We have a long-term partner in H.I.G., and they are very committed to the growth of HelpSystems," the executives emphasize. "We will continue to expand our offerings in the years to come to meet our customers’ needs. HelpSystems remains very committed to the IBM i market, and H.I.G. is supportive of this strategy. This is demonstrated by the fact that since we have partnered with H.I.G., we have bought Tango, Linoma, and BugBusters Software Engineering, all of which have IBM i products."
"The larger goal in our acquisitions is that our customers want a broad range of solutions to solve their challenges and prefer not to have to manage hundreds of vendors to do so," Heim points out. "They want their solutions to work together, see continued enhancements, and be backed by world-class support. They also want to be able to buy a product today and ensure that their investment will be protected in the years to come. We believe if we meet our customers’ needs here, we will continue to be a growing and successful organization over the long haul."
Heim and Huntington also think their company's expansion hasn't significantly altered its brand.
"HelpSystems has always been known for high-quality products and world-class support," Huntington maintains. "This was initially for the Robot product line, but we have extended these foundational items to all our acquisitions. So the foundational elements of our brand have not changed, but now our brand is also known for being a broad solution provider for the IBM i."
HelpSystems Supports IBM's Strategic Direction
Heim and Huntington emphasize that their company's support remains strong.
"We have been very impressed over the last couple of years about the IBM i product introductions and future roadmaps from IBM. We believe IBM fully recognizes the strong and loyal customers for this platform. The combination of IBM i, AIX, and Linux on POWER has enabled IBM to compete with Intel in offering world-class technology for the data center. We believe IBM should continue this investment as it helps keep our IBM i environment involved in newer technology like storage area networks and solid-state storage drives, along with improved speeds for business intelligence and other workloads on IBM i."
The executives declined to comment directly on IBM's strategy for using the Watson platform for cloud and data analytics but did say that "…while we are fully supportive of IBM and its strategy with Watson, we also believe we will continue to be a strong and growing company regardless of our Watson strategy.
"We want to unlock further value from our customers' data, both inside our products and within our customers' larger organization, so we are very much aligned with this larger direction of IBM," the executives added.
HelpSystems' Views IBM i Market as Stable
Despite the increasing prevalence of other platforms in IBM i shops, the HelpSystems executives don't see this as a threat.
"Virtually 100 percent of our customers have mixed environments, and this reflects the IT world of today," Heim observes. "IT organizations have a heterogeneous mix of platforms, and it is our job as a vendor to simplify their administration and operation of all of them."
"We do a fair amount of research on this marketplace and share the results of this research both with IBM and the broader market," Heim adds. "We see a very stable market and our research is showing that there are more companies adding workloads [to the IBM i] than migrating completely off the platform. In fact, 22 percent of the IBM i marketplace is actually growing their workloads on the IBM i. Our annual IBM i Marketplace Survey revealed these numbers. We are firm believers in the long-term future of the IBM i market."
When asked if HelpSystems sees any differences in the outlook for software sales as opposed to services sales in the IBM i market, Huntington remarked, "For us, both models are growing."
In comparing the relative balance of its business in cloud services licensing versus on-site licensing, Huntington offered, "We help customers, mainly managed service providers, to oversee the infrastructure that runs their public or private clouds. We provide the security, monitoring, and automation for these environments on IBM i."
Commenting on how well HelpSystems has been able to adapt its product offerings to mobile devices, Huntington said, "We have our InSite framework that we are extending across all our products. The framework is web-based and supports all mobile devices. Our customers have asked for this feature, and we are responding."
HelpSystems Backs COMMON
HelpSystems remains strong in its support for COMMON.
"IBM i customer loyalty cannot be denied and is very unique in the technology world," Heim observes. "COMMON helps to solidify this loyalty. Not all customers can afford to travel to COMMON events, but for those that can, it is definitely a good investment in learning. We are very active at COMMON and have a large number of speakers providing workshops. Short of IBM, we are probably the company with the largest number of speakers and average about 14 sessions at most COMMON conferences. Locally, two of our team members (split presidency) help to run the QUSER user group for IBM i in the greater Minneapolis area. Several of our experts speak and vend at other regional user groups on IBM i like OCEAN, TUG, NEUG, Omni, and others. Fall of 2016 we are sponsoring two students to attend Fall COMMON in Columbus, Ohio, for free. For Spring COMMON, we have sponsored the John Earl (founder of PowerTech) Annual Speaker Award, which pays for one speaker’s fee for COMMON each year.
"As for our own product training, we offer both scheduled training and onsite training for most of our products and offer consulting services for those that want even more of a fast start. Different customers have different needs relative to education and consulting, and we need to support this myriad of wants. We conduct webinars that are free on topics like security, backups, SQL, work management, and other areas of our expertise. This helps bring free education to the marketplace for those that cannot afford to travel to conferences," Huntington concludes.