Appcelerator is one of the leading Enterprise-class MADP (Mobile Application Development Platform) vendors with household-name customers like Farmers Insurance, T-Mobile and Bed, Bath & Beyond. Appcelerator cultivated a vibrant developer community and expanded its platform offerings, forming partnerships with other category leaders like SOASTA and Crittercism in addition to some tuck-in acquisitions. Though they had raised almost $90M, rumors were cash flow was a challenge. Taken together with the consolidation going on in the mobile space, to those familiar with Appcelerator the question was always “when” not “if” Appcelerator would be acquired.
After months of rumors of a takeover by a larger, well-known company (Microsoft was rumored to be a suitor for both Appcelerator and Xamarin), Appcelerator was officially sold on Monday to a company you likely never heard of.
So now that the deal is done, what should we make of the news? And more specifically, what should you do as a result? Let’s explore.
Who are these Axway guys anyway?
The good news is that Axway is a publicly traded ~$300M company providing “solutions that help manage business-critical interactions through the exchange of data flowing across the enterprise.” Their clients include large, well-known companies such as BMW, P&G, ING and AstraZeneca, which bodes well. Axway seems to know how to sell into the enterprise (never a great strength of Appcelerator) so potentially they’ll make more hay with the AppC Platform than the founders were able to. That’s a very positive sign.
Further, Axway is part of the much larger Paris-based IT services company, the Sopra Steria Group, with 3.4 billion and 37,000 employees across 20 countries.
So from a financial stability perspective this is a big win for those who’ve made commitments to the Appcelerator platform.
How should I react?
There are 2 ways to respond to big news like this. You can channel your inner Chip Diller and freak out or listen to Aaron Rodgers’ advice and R-E-L-A-X.
We say listen to Rodgers. Here’s why:
- Nothing significant is likely to happen for at least 3-6 months. The sheer logistics of the acquisition assures that. That’s not to say it never happens, but it would be surprising to see an about-face in a shorter time period.
- So far everyone is saying the right things: nothing is changing, your contacts and support mechanisms stay the same, Axway is retaining key employees and is continuing to invest in the Appcelerator platform. Of course there’s always the chance this could all be spin, but what would be the purpose of Axway killing the revenue stream and deprecating the product they just bought? Further, while there may be little product overlap, there seems to be a fair amount of overlap in clientele. There’s no reason Axway would want to chase away customers of both product lines.
- It certainly doesn’t look like an acqui-hire—where they want the people and not the product. About a quarter of the Axway team resides in Indian development centers which should enable more efficient scaling of the engineering team, an easy way to increase investment without a linear increase in costs. So there’s every reason to expect greater investment in the AppC platform.
- Axway’s API Management, Cloud integration and Identity Access Management should only serve to enhance Arrow (MBaaS) platform.
Our main concerns would be that the partnerships supporting key tentpoles of the AppC platform (SOASTA and Crittercism) cease to exist a year from now. But since no Axway solutions fill those gaps it’s probably an unjustified concern.
Additional causes for worry:
- Will Axway muddy the market waters by folding the Appcelerator platform into Axway’s branding and product direction? Though they already practice sub-branding, so long as they transition the brand in a structured manner over time it shouldn’t cause any issues.
- Will Axway materially alter the product roadmap or focus resources on integrating the two product lines in a manner that causes the platform to fall behind the competition and under-serve client needs?
- Do we misunderstand Axway’s motivation? Is this an investment business to grow and sell or a strategic direction? Axway is a large firm but not large enough that they can afford the losses Appcelerator has been racking up over the long haul.
The following is feedback we’ve received from clients (which has been very positive):
- On the spectrum of acquisition types, this one can be called “very, very friendly.”
- “We’ve been assured it will be business as usual with more emphasis on extending their ‘API-first’ vision.”
- “I’m cautiously optimistic the platform will continue to thrive.”
Chance favors the prepared mind
But this doesn’t mean you should sit back and hope for the best. There’s always uncertainty with any acquisition and things don’t always happen in a way that makes sense. In addition, their FAQ’s afford them a fair amount of wiggle room for the future.
So what should you do?
- Contact your Appcelerator sales rep to express your concerns and get answers. If the rep doesn’t have them, move up the food chain.
- Identify a Transition Plan: Not to jump-ship right away but as a backup in case things don’t go the way you hoped. So you have an alternative path to move forward. Make sure you’re up to speed on other MADP platforms. What are their strengths and weaknesses? Can they support the complexity of your current apps? How well do they align with your team’s skillset?
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