Aldon Works on Acquisitions to Build Out Biz

"Aldon is growing and we are working hard to make sure that the companies we will acquire will add value," says Magid, who has been tasked with figuring out how to build a platform of companies in the System i and adjacent distributed systems spaces that hook into the programming problems that data centers face. Magid says that Aldon is in negotiations with a number of companies, and for obvious reasons is not at liberty to say what companies Aldon is talking to. But he did offer one funny comment: "What we are learning about acquisitions is that people can say, 'No.'"

That, of course, is what Aldon itself said to a number of prospective buyers that approached it over the years. So this is not exactly a surprise. But it is different to hear it than to say it. Still, when a fit is good and the economic terms are right, acquisitions do happen, and with Marlin Equity funding the acquisitions and no shortage of good companies on which to build a platform of businesses devoted to application development, there is no reason to think that Aldon will not be able to build out.

The process is a bit tricky, however. Scholl, who coordinated the development of Aldon's products and means of selling them for many years, has the doubly tricky task of trying to figure out what to build and what to buy--and then trying to assess whether an acquisition can be done in a timely fashion. "In development, you worry about when a product will be completed," says Scholl. "In acquisitions, you worry about who will say, 'Yes.'"

While Magid and Scholl did not name names for their potential acquisitions, they did talk about the areas in which Aldon is looking to do deals to add on to the Aldon Suite of application lifecycle management tools as part of its "System i rollup strategy," as Magid put it. Security vendors in the space topped the list, as do vendors of application testing and development tools. Magid also says that they are interested in providing the kind of simplified application build process management software that Aldon does on the System i platform to users of distributed systems. But the problem is that a lot of the functionality that makes building applications easy on the System i is actually in the i5/OS operating system. Aldon is also looking into how it might expand its support as a repository for Web services and other elements of a services oriented architecture (SOA) style of building composite applications. The idea is to tie the services that programmers create into a repository that contains information about IT service level agreements for application performance, about who is using applications, and about other vital statistics that can help IT managers assess the costs of services and who should ultimately be paying for them within the organization.

Aldon just finished its first quarter, and says that it grew compared to the prior year. "Business continues to be good, and we are hiring," says Scholl. A lot of Aldon's business these days is coming from larger shops with WebSphere Development Studio Client as the development tool and WebSphere Application Server as the deployment environment. "Shops with 50 or fewer RPG developers used to be a big business for us, but we do not see as much of this business any more," says Scholl. "If we were not supporting distributed systems, Aldon would be shrinking."

As for looking ahead and doing acquisitions, Magid is pretty clear that the i5/OS and OS/400 platform is the center of what Aldon does. "Our most fertile ground to sell our open systems products is into out existing System i market." As we all know, there is no such thing as an RPG-only shop these days.

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