Progress Buys DataRPM for $30M to Build “Cognitive” Business Apps
[Updated 4/3/17, 4:39 pm. See below.] Progress Software, a 36-year-old software company, is pushing into machine learning and connected device technologies with its $30 million acquisition of DataRPM, a privately held firm based in Redwood City, CA.
The deal is the first acquisition made by new Progress CEO Yogesh Gupta, who took the helm in October.
Bedford, MA-based Progress (NASDAQ: PRGS) offers a variety of software products and services designed to simplify the development, deployment, and management of business applications.
One of Progress’s strengths has been software that connects and integrates data from various programs, Gupta told Xconomy in an interview last fall. But the emergence of the Internet of Things is bringing an explosion of data from a variety of new sources.
“To me, that’s sort of an interesting thing for us to take a look at and say, ‘Hey, how do you deal with the new data sources needed to build the business applications of tomorrow?’” Gupta (pictured above) said in November. “The amount of data increases so much that human beings can’t keep up with it. The only way to deal with it is to have machines deal with it” through machine learning and data analytics technologies, he said.
That’s where DataRPM comes in. The company provides machine learning tools that aim to predict when industrial machines will fail, which can help businesses save money. DataRPM’s customers include Jaguar, Samsung, and Mitsubishi Heavy Industries, according to a Progress press release.
Under Gupta, Progress is now positioning itself as a provider of technologies for building “cognitive-first” business applications.
“Our customers and partners already use many of the key product capabilities from Progress necessary for this approach—front-end application development tooling, mobility, back-end application services, and data connectivity,” Gupta said in a prepared statement. “With the acquisition of DataRPM, we now have leading predictive analytics capabilities to round out our cognitive apps platform.”
The deal includes $28.3 million in cash, and DataRPM’s founders will receive $1.7 million worth of restricted Progress stock, the company said.
DataRPM was founded in 2012 and had raised at least $6 million from investors, according to SEC filings.
Meanwhile, Progress is going through a significant restructuring. In January, the company announced it would lay off about 450 employees—more than 20 percent of its staff. [This paragraph added.]