IBM to buy Blue Bell technology firm

Jim Sheward is a cofounder of Fiberlink.
Jim Sheward is a cofounder of Fiberlink.
Posted: November 15, 2013

IBM has agreed to buy Fiberlink, a Blue Bell firm that connects companies to their field staffs through smartphones and other technology.

Fiberlink's patents and its 400 employees (up from 250 two years ago) will join International Business Machines Corp., the companies said. The staff includes 150 software developers, cofounder Jim Sheward, president Chris Clark, and engineers, programmers, and salespeople at a new office opened in Center City last year in the hope of attracting recent college grads.

"We're pretty excited that our Philadelphia company has sold to the largest IT company in the world" and will now sell its products in IBM's global markets, Clark said in an interview. He said Fiberlink had worked with IBM on common clients for more than a decade.

IBM, like SAP, Oracle, and other big business-software suppliers, has been rushing to buy or build new services it can sell to corporate clients as American workplaces move away from personal computer networks, in-house servers, and big-ticket enterprise software packages toward mobile phone- and tablet-based services linked to distant Google or Amazon computer servers - what computer people call "the cloud."

"Mobile is becoming the primary way organizations communicate and transact with employees, partners, and customers," said Caleb Barlow, IBM director of mobile security, in an e-mailed statement. Fiberlink is the latest in a string of IBM mobile-based acquisitions, he added.

The deal will add Fiberlink's MaaS360 "bring-your-own-device" data communications, reliability, and security services to IBM's "Software as a Service" (SaaS) product lines, according to Robert LeBlanc, IBM senior vice president for middleware. "The acquisition of Fiberlink will enable us to offer these expanded capabilities to our clients," he said in a statement. IBM's goal is "bringing all mobile resources together in one platform."

Fiberlink has reinvented itself several times, and passed through some lean periods, since it was started in 1992 to build systems for keeping what Sheward called "road warrior" salesmen in touch with the home office by phone and, later, laptops and PCs. Fiberlink has counted AstraZeneca, Children's Hospital of Philadelphia, DreamWorks, Independence Blue Cross, and LinkedIn as clients.

The company raised $80 million in the 2000s from investors including Technology Crossover Ventures in California, General Electric, Goldman Sachs, Edison Ventures of Princeton, and NewSpring Ventures in Radnor.

The companies would not say what IBM is paying for its latest acquisition. A rough estimate multiplying Fiberlink's staff by the small-software-company rule of thumb of around $125,000 in recurring revenue per employee yields an estimate of $50 million in yearly sales. People familiar with the company said it likely sold for at least three times that price, or roughly $150 million.

That would put the sale price roughly in line with Accenture's purchase last month of Procurian, a larger but less rapidly growing King of Prussia purchasing-software firm, from Internet Capital Group of Wayne for $375 million.


JoeD@phillynews.com

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@PhillyJoeD

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