Dell’s recent deal to sell subsidiary Boomi to private equity players Francisco Partners and TPG Capital initially raised some eyebrows, but now one market analyst claims it has potential — granted it, and future buyers, are in sync.
This is according to Geoff Woollacott, senior strategy consultant and principal analyst at industry analyst firm Technology Business Research (TBR), who previously forecasted that Boomi would be likely put up for sale again in the near future — the nature of private equity players is to buy, restructure and resell for a profit, after all.
Broadly, Woollacott previously claimed the subsidiary had an assortment of issues, like how it lags with application programming interface (API) tool sets and that its sweet spot of the ‘late majority’ large and midsize enterprises is under threat.
The potential of software-as-a-service (SaaS) players looking to bake in integration platform-as-a-service (iPaaS) offerings was also raised, but Woollacott said that "emerging SaaS players will be less inclined to worry about on-premises and bespoke integrations where Boomi excels”.
Following the publication of this perspective in a blog, Woollacott claimed that Boomi subsequently provided TBR with “deeper insight into its most recent achievements, activities and aspirations”.
As a result, the analyst has seemingly changed his tune, now claiming that the provider “has a sound growth strategy with a high chance of success, assuming the company and its new owners are in strategic alignment”.
“Provided there’s a vision match with the new owners, Boomi has solid platform depth and breadth with a reasonable innovation road map to survive and thrive in this ever-accelerating business pivot where automating data management, seamlessly moving data and empowering the right users to engage with data are paramount to maintain a persistent competitive advantage no matter the standard industrial classification (SIC) code,” he said.
For example, Woollacott claimed that global systems integrators (GSI) are moving towards offering managed services operations. Therefore, by underpinning GSI software development with its own tools, Boomi could gain “a distinct selling advantage” into large enterprises, and it will have access to influencers and ‘quasi sellers’.
He also said keeping up relationships will give Boomi a chance to keep an ear out for emerging technology vendors that GSIs and early adopter enterprises are mulling over, especially those that pose an asymmetric threat to the Boomi core.
“Furthermore, Boomi made clear it does not aspire to substantially grow its consulting and services operations," Woollacott claimed. “GSIs will find this clear swim lane delineation refreshing considering the ways in which traditional services and software firms are beginning to encroach on one another’s core offerings.”
In addition, Boomi’s move off the beaten path of traditional selling motions through its AtomSphere Go edition, referred to by Woollacott as a “frictionless buying experience,” is another point worth mentioning by the analyst, as it taps into the how buyers want to research products themselves, then purchase them via an online portal.
He also said it gives the provider a means of disaggregating its various services to allow it to move down market to reach late-majority enterprises.
On top of everything else, Boomi also announced AtomSphere Go on the Amazon Marketplace, which Woollacott referred to as “the mecca for seamless, add-to-cart ordering”.
“That type of selling, often called 'land and expand,' has a very different set of operating best practices than traditional direct, or blue suit, selling. The aspiration of this kind of selling is lifetime customer value (LCV),” he said.
“It requires a different type of telephone support that is part technical advisory and part consultative selling for cross- and up-sell opportunities with smaller enterprises.
“It is also a business model where revenue and expense do not align to the 90-day quarterly reporting cycle. This requires a leap of trust to embark on such selling approaches, as costs will far outweigh revenue until scale is achieved and the 'flywheel effect' kicks in.
“For startup operations it is a very prominent challenge, and for Boomi the challenge will come more from setting up the operations with different motions and finding a way to balance investing in selling motions with awaiting payoff of the new add-to-cart operations,” he added.