ASNA Splits from BluePhoenix

Corrected: January 12, 2011

by Dan Burger

Sometimes breaking up is not all that hard to do. When ASNA and BluePhoenix tied the knot in August 2007, no one would have bet that in less than three and a half years later the two companies would go their separate ways. ASNA, for 28 years a vendor in the IBM midrange, announced last week it was leaving BluePhoenix, a company focused on the mainframe business. Anne Ferguson, president of ASNA, called the move "a management buyout."

The "new" ASNA emerges from the BluePhoenix years somewhat changed from the San Antonio, Texas-based company that was looking to build the services side of its business. Most notable is the addition of a European unit known as ASNA International, which consists of ASNA distributors in Spain, Italy, Germany, and the United Kingdom. ASNA International was formed during the ASNA/BluePhoenix union, but it operated independently and was not part of BluePhoenix. ASNA has had a European presence since 1986.

The combination of the European business unit with the U.S.-based ASNA adds power to the ASNA lineup, according to Ferguson. She sites increased strength in the services area as one of the reasons.

"Our resources for training and delivery are far greater now that we are one group," she says comparing ASNA before and after its union with BP. "We also have a strong technical staff in Europe that was built up over the past two years that will bring a lot more support capability and delivery ability. We've done a lot of AVR/.NET development in Europe."

Comparing ASNA before BluePhoenix with the years spent with BluePhoenix, Michael Killian, vice president of sales, says the difference was in the singular focus on the iSeries.

"The new ASNA will allow us to continue to grow that with the singular focus on what we do well," Killian says. "We are focused on the OS/400 RPG environment and moving companies to .NET as opposed to Java or something else."

Killian says that ASNA was experienced primarily in building new applications with its products and not so much in the services end of the business. "We hadn't done a lot of migrations," he says. "We've found it takes a different kind of services. Much of the expanded services were driven by customers without the internal resources to handle some of the migration/modernizations into .NET. They looked to our expertise."

The union with BluePhoenix was expected to bring ASNA technology to the attention of mainframe shops (BluePhoenix customers) that also had IBM midrange servers in the systems mix.

"ASNA did not benefit from being introduced into mainframe shops, where BluePhoenix had its strength," Killian said. "Theoretically, it made sense. In reality, organizations that have mainframes and midrange computers operate those IT departments as separate divisions that never talk to one another."

"The match wasn't necessarily the greatest," Ferguson admits. "BluePhoenix is predominantly a mainframe company and they predominantly sell services. ASNA is an iSeries company and, although we do sell services, our services are directly related to our products. We are really a products company that provides expert services in our area. We don't do blanket services. We are focused on training and knowledge transfer and mentoring while providing a new technology environment. We do Web development, but it's all around products that we offer and the solutions we offer. It's more than just doing a service and delivering it. I think it [ASNA] was a hard company for Blue Phoenix to absorb."

Most of the key people at ASNA remain onboard. Anne Ferguson will be the president of ASNA in the United States. Carlos Valero, the Spanish distributor and an ASNA partner for 12 years, has the CEO position in Europe and is headquartered in Barcelona. Eduardo Ross continues as the vice president of research and development; Michael Killian remains as vice president of sales; Roger Pence carries on as director of education; and Tim Jansen maintains the technical director position.

No financial details regarding the buyout were released.

When ASNA and BluePhoenix were joined in 2007, BluePhoenix paid ASNA $8.7 million (a $7 million cash payment from BluePhoenix and a $1.7 million dividend) with an additional consideration to ASNA's shareholders if certain profit and revenue targets are achieved by ASNA, in 2007, 2008, and 2009.

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