Reinventing Progress Software—Boston’s Next Billion-Dollar Company? Part 2
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people saying, “This is all really nice, but I don’t even know how effective my existing business is. I have 20 years’ worth of legacy software, layer upon layer, from different vendors, and before I start adding bits on, I don’t even know where I am.” Through Actional, which is our business transaction management product, you can non-intrusively plug into legacy applications and find out where the bottlenecks are.
X: As you noted, Progress’s growth over the past decade has mainly been through acquisitions. When you say that you want to double your revenues to $1 billion, are you saying that you’re going to do it through this bundling and this unified marketing strategy, rather than through more acquisitions?
Richard Reidy: It is the main way, but I would say that it would not preclude us from doing further acquisitions and rounding out the product portfolio. But even without acquisitions, I expect double-digit growth this year, and we feel pretty good about the future. But we probably will be doing more acquisitions this year, just to round out the strategy.
X: How has your acquisition strategy changed over the years? I’ve heard you make a distinction between “anchor” acquisitions and “tuck-ins.”
RR: We’ve historically classified our acquisitions as anchor acquisitions where we diversify, or as tuck-ins. DataDirect [a 2003 acquisition] was one of those anchors, an established, healthy business that we bought, and we subsequently did tuck-in acquisitions, using DataDirect as a primary assembler. Right now, I don’t really have the desire to diversify the company any more. Rather, I think all future acquisitions will be to enhance the existing strategy. To the extent that we may add data cleaning tools, improved visibility products, dashboarding, whatever it might be, it will all be behind this strategy of operational responsiveness. You won’t see us going into source code control or business intelligence or document management.
X: The different ways that large companies go about integrating their acquired companies is something we’ve studied a bit here at Xconomy, especially with big local players like IBM and EMC. What do you feel like you’ve learned about that process over the years?
RR: There’s a big difference in our maturity and our understanding of the process from the first three or four acquisitions we did to the last three or four. It’s almost cookie-cutter for us now. It’s not scary for us. Every time we do one, there might be a little bit of change or surprise, but generally … Next Page »