Software licensing Industry still consolidating!

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Software licensing Industry still consolidating!

By Jon Gillespie-Brown | January 12, 2009

Only this month our industry has downsized by 2 major players!

Acresso has acquired Intraware.

Acresso Software (Acresso), a privately-held company and an investment of private equity firm Thoma Bravo, LLC, announced today it has completed the acquisition of Intraware Incorporated (NASDAQ: ITRA), a provider of digital delivery and entitlement management services. Intraware is now a wholly-owned subsidiary of Acresso.

SafeNet (Vector capital) has completed it’s bitter takeover of Aladdin systems.

Aladdin Knowledge Systems Ltd. (NASDAQ: ALDN) today announced that it has entered into a definitive merger agreement to be acquired by an investor group lead by Vector Capital, a leading private equity firm specializing in the technology industry, in a transaction valued at approximately $160 million.

Vector now own both SafeNet and Aladdin i.e. the whole “dongle” hardware DRM market!

Commenting on the announcement, David Fishman, Partner, Vector Capital, said, “We are very excited about adding Aladdin to our portfolio of outstanding technology companies and believe that placing Aladdin’s DRM and Authentication assets under common management with those of our portfolio company, SafeNet Inc., a global leader in information security, makes considerable strategic sense and will greatly benefit all stakeholders. Aladdin is an exceptional company, with significant potential and a strong commitment to its employees, partners and customers worldwide. We understand Aladdin’s industry and business well, and look forward to working collaboratively to ensure a smooth and expeditious transition.”

So what does all this mean for you the “customer” – well it means less choice, less competition and greater control in the hands of the largest players in the Industry.

For Nalpeiron, who have already weathered our only major competitor Microsoft, and continued to double our growth year on year it’s good news in many ways.

More and more customers of these large players are joining the only viable independent alternative, Nalpeiron, and also making the change to an “outsourced” model with compelling features, pay as you go pricing and a total “hosted” solution out of the box in 24 hours.

The great thing is that our service is now totally unique and there is “clear blue sky” between us and the competition.

Also, so many customers are looking to save costs in these tough times and they are moving away from expensive inflexible dongles ($30-40 each) to Nalpeiron where they can get far more for far less. License costs run as low as $1 – a huge saving over Vector’s offerings from SafeNet and Aladdin.

As for Acresso, they are a mixed bag of Installshield and Macrovision and now they have yet another totally different technology platform in the mix but there appears no clear strategy with all three product areas being so different and totally unconnected.

Acresso’s pricing and support policies have also driven many new customers to Nalpeiron where they don’t have to pay the license “tax” of a % of revenue every year to Acresso and can pay way less for better features and do that “as they go” offering better cash flows as well as savings in overall annual cost to the ISV.

Of course it will take a while to see what happens but the challenge of merging different cultures from different countries (US and Israel) will be interesting to watch for Nalpeiron!