After being strategically carved out and sold by larger companies, these software businesses found Volaris to be a comfortable new home
After completing more than 100 acquisitions over a quarter of a century, we have seen that software businesses often reach a stage in their development where they may need a little help to continue thriving. Through a thoughtful acquisition and integration process, Volaris aims to provide a customized fit for businesses that find a permanent home among our community of vertical market software companies.
We have previously covered why large companies choose to divest software assets to Volaris. Now, we profile three examples of large companies that sold business units to us and check in on each to see how they have settled in.
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- INAP – Sold Ubersmith in 2021
- John Deere – Sold AGRIS in 2010
- United Rentals – Sold Wynne Systems in 2012
INAP: Sold Ubersmith in 2021
INAP (previously known as Internap) is a global provider of data center and cloud solutions. Based in the U.S., the company owns and operates data centers around the world and delivers services in North America, Australia, and the EMEA and Asia-Pacific regions. Up until 2021, it owned an independently run business called Ubersmith, a provider of subscription business management solutions for the cloud.
Although Ubersmith had made a lot of progress as a smaller company, the company did not fit strategically into INAP’s product portfolio. Ubersmith is a software company, while INAP was primarily focused on services. On top of that, INAP competed directly with most of Ubersmith’s customers. This was a challenge in a fast-moving market where they had to compete with well-funded companies which included public companies and private start-ups.
In March 2020, INAP started to look at divesting non-core assets to streamline its portfolio. One of the assets identified as non-core was Ubersmith. In July 2021, Ubersmith was acquired by Lumine Group, Volaris Group’s communications and media portfolio. The CEO of Ubersmith, Kurt Daniel, has stayed on with the company and at the time of acquisition had been with the company for nearly seven years.
Ubersmith has already benefited from the onboarding process as one of the newest companies to join Lumine within Volaris. The team was open-minded to the best practices and approach to professional services that Volaris and Lumine Group introduced, and Daniel says they have experienced “excellent results” so far.
“Because we were a carveout, we had to put together finance, accounting, HR, and payroll structures in right away,” he said. “Lumine helped us do this quickly and painlessly. We are able to act more completely as a company post-acquisition and have our own finance director for the first time. Now, we can put together our financial results within days, whereas before our acquisition it took months with the shared services we had from our parent company.”
The company has also taken opportunities to improve security and compliance, and employees have taken advantage of mentoring and networking across the broader Lumine organization. As part of Lumine Group, Ubersmith’s parent company no longer competes with any of its customers, and Daniel is relieved that his team no longer needs to manage that tension. Ubersmith’s approach to software product advancement is shifting so that the team is better able to respond to features requested by their customer base. The team is working on offering more complete solutions for clients and developing best practices around professional services and managed services that will better suit their long-term goals. And the company has a strong plan for how to grow the company faster and more profitably than before. Ubersmith’s employees have also been given promotions and new opportunities, including for their head of sales, head of maintenance, and head of managed services.
Looking ahead, Daniel sees a bright future for Ubersmith within Lumine Group and Volaris.
“We’re in a better home now, and it feels more global too.”
John Deere: Sold AGRIS in 2010
John Deere (also known as Deere & Company) needs little introduction in the world of agriculture. Founded in 1837, their ubiquitous yellow and green branding is immediately recognizable on many types of farm equipment, including tractors, harvesting equipment, balers, planters, seeders, and other heavy machinery. The brand has cultivated an especially loyal following among farmers, who when making purchasing decisions may well live by the sentiment: “Nobody goes wrong buying a John Deere tractor.”
John Deere sells products primarily through a large network of dealers. Initially, Deere’s strategy for buying AGRIS was to provide more services locally and expand the footprint of dealers into local geographies by selling a grain enterprise resource planning (ERP) solution. However, after owning AGRIS for close to 11 years, John Deere realized that their company was better served to focus on their strength of building top-quality machinery, while aligning the AGRIS business with a company known for its strengths in the vertical market software industry.
John Deere closely assessed its portfolio of software assets and categorized each as being core or non-core to the business. An asset was considered core if it was directly related to equipment being sold, such as software embedded in tractors. For several reasons, Deere came to see AGRIS as a non-core asset.
Firstly, John Deere was trying to sell AGRIS software through dealers who were used to selling big-ticket equipment, but had little experience supporting grain-based accounting software. In addition, all their internal processes were built around building and deploying equipment. Whereas most of John Deere’s core digital assets had a product lifecycle with long release schedules aligned with their core products, AGRIS had customers who requested new features frequently. The market for AGRIS had changed in terms of the new product innovation required by customers.
Ultimately, John Deere chose to sell to Volaris because of Cultura’s domain expertise and focus in the Agri-food vertical.
“Deere had a reputation to uphold as being a company that looked out for the best interests of farmers,” said Lyle Hartz, who previously worked at John Deere and joined Volaris through an acquisition. “One of the biggest concerns we had was finding a buyer that wouldn’t alienate our software customers. It was important to us that we partner with a company that would assure the software’s long-term viability.”
After speaking to leaders at Cultura and Volaris, Deere was reassured that customers of AGRIS would be looked after in the long-term and that Cultura would continue to invest in the business, rather than flipping the company for quick profits and potentially affecting longstanding relationships.
Now, close to a decade after the acquisition, the business unit that was formerly AGRIS has undergone many positive transformations. On the talent management side, several product managers and sales and marketing managers received new leadership opportunities and benefited from the talent review process introduced through Cultura. To improve the team’s ability to react to changes in the business environment, the unit that was formerly AGRIS was split into three different units (Greenstone, Solentra, and Proceres), driven by the needs of their largest customers. Finally, to better serve customers, the business refocused the product so that it was better able to provide services.
Today, the business that was originally AGRIS has made a home at Volaris. Its peers now include several other vertical market software companies that make up the Agri-Food portfolio within Cultura, spanning North America and Europe. Volaris has followed through on its promise to John Deere and provided a stable base for the divested business to grow.
United Rentals: Sold Wynne Systems in 2012
United Rentals is one of the largest equipment rental companies in the world. In late 2012, the company finalized its decision to sell one of its business units, Wynne Systems, to Volaris. Wynne makes an international enterprise resource planning (ERP) software product with a loyal customer base that is used in 6 continents, with software products in 17 languages and available in 40 countries.
“Our previous parent company’s core competence was renting equipment, and having an enterprise software division did not suit their operational model,” said John Bureau, who at the time of acquisition was General Manager at Wynne Systems.
After holding discussions, the senior leaders at Wynne Systems and Volaris found many similarities in their core values. The team at Wynne Systems was comforted by the promise that they would be supported by Volaris in their goal to deepen relationships with their core customer base.
Since being acquired, Wynne Systems has risen to the expectations set by Volaris Group and taken advantage of the new processes, techniques, and methods that were offered. Volaris communicated to Wynne Systems that their employees were valued, and the company has experienced a zero headcount reduction since the acquisition took place.
Now, several years after the acquisition, Wynne Systems has thrived by using a consistent set of metrics to measure the performance of the business. The Volaris team has helped Wynne more accurately assess the market value of their products and helped hone in on key market segments to better serve their customers. Wynne Systems has also benefited from a legal structure to help them patent some of their products.
Wynne Systems continues to have a promising future in its new home. Volaris encourages Wynne to reinvest profits back into the business, which helps them develop and improve on their products while expanding their customer base.
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