Jama Software sold for USD 1.2 billion
Jama Software is the manufacturer of a tool for requirements management. As I worked for the company for almost four years, I am naturally very interested in this development. Who was Jama sold to and what does the acquisition mean for systems engineering? That's what we're talking about today.
From holding company to holding company
Jama was sold to Francisco Partnersa private investment company that focuses on investments in technology and technology-based service companies. This distinguishes This acquisition differs significantly from those I have reported on over the years. Many acquisitions were of a strategic nature, where a tool for one aspect of product development was added to the portfolio of a larger company such as PTC, IBM, Siemens or Dassault.
It is noteworthy that the seller (at least the largest shareholder) is also an investment company, namely Insight Partnerswhich had invested USD 200 million in Jama in 2018which was effectively an acquisition.
Jama since 2018 Acquisition
At least roughly speaking, the value of Jama has increased six-fold in six years since its acquisition by insight Ventures. Unfortunately, the key business figures are not public, i.e. turnover, ARR and the like. However, Jama has regularly released new features and improvements. The picture that emerges is more evolutionary than revolutionary. I therefore assume that sales figures must have risen dramatically over the past six years.
Here is a summary of the main news over the last six years:
- Requirement qualityAn optional extension evaluates the quality of requirements with Natural Language Processing (NLP).
- Integration: New integration options with Jama Connect Interchange.
- Risk and hazard analysis: Features such as Preliminary Hazard Analysis (PHA) and Failure Mode and Effects Analysis (FMEA) with a focus on standards such as ISO 14971 and IEC 60812.
- Creation of requirements: Jama has finally introduced a "real" document mode that allows editing in context.
- Reuse and baseline management: The existing functionality has been expanded.
- Test management: The visibility of test results in connection with requirements for a better context has been increased.
- Review Center: Several improvements have been introduced here, particularly with regard to the review of test plans.
Why another holding company?
The sale to another holding company shows that there is currently no interested or suitable company that could afford Jama. Until the time when PTC intland (Codebeamer) had purchasedI would have tipped PTC as an interested buyer. IBM (DOORS Next) and Siemens (Polarion) were out of the question, as both companies already have more than one requirements management tool in their portfolio ("Classic" DOORS and Teamcenter Requirements).
Another interested portfolio company might have been Dassault. Also a tech company like Microsoft that in product development in recent years would have been a candidate.
However, as we can now see, the price of Jama was simply too high for many portfolio companies to justify a strategic acquisition. The situation is different for a holding company, as part of Insight Partners' business model is to sell companies profitably after a few years. The situation is certainly similar at Franciso Partners.
Synergies in the portfolio - Perforce?
Another possibility is, of course, that Francisco wants to exploit explicit synergies in its own portfolio, i.e. it could merge several portfolio companies. While browsing through the rather extensive portfolio, I came across Perforcewhich I had already used in 2001.
However, Perforce already has a solution for requirements management, namely Helix ALM. Although this is surprising, the product is, as the name suggests, positioned for ALM. Nevertheless, Helix supports requirements management, traceability and many other features in this area.
On the other hand, IBM, PTC, Siemens and Atlassian also have redundancies in their portfolios. So that is not an exclusion criterion.
Conclusion
I am pleased that Jama has now been sold for an impressive price. Even though I am surprised that the buyer is a holding company, it shows that Jama wants to play in a different league. I am curious to see what the future will bring.
