Infinite Software Buys Another HP Reseller

Published: January 12, 2009

by Timothy Prickett Morgan

AS/400 and mainframe legacy application rehosting software supplier Infinite Software has acquired another reseller of Hewlett-Packard. Last Friday, Infinite announced it has bought a controlling stake in Roundstone Systems, its second one since forming a partnership last year with HP to sell its rehosting software.

Roundstone Systems, which is located in Oakland, California, was founded in January 2003 and was one of HP's fastest growing resellers that year. The company has partnerships with HP, Microsoft, Oracle, Brocade Communications, VMware, and Novell, and has anchored its business on selling HP enterprise and blade servers with systems software. Last February, Roundstone tapped John Fournier, one of its founders and an executive with experience at EMC and mainframe supplier Amdahl (which disappeared into the maw of Fujitsu), to be its president; the other remaining company founder, Alex Vinson, a former infrastructure engineer at Pets.com, is still there, but back in February 2008, Tim Joyce, the third founder and the company's president and chief executive officer, cashed out of the company and the IT industry altogether.

You might be thinking it is unusual for a software company to be buying not just its first, but its second hardware reseller. And this is indeed not the usual course of events. But it used to be that the software companies in the midrange were all big resellers, so maybe Infinite Software is trying out some plays from the 1980s midrange playbook as it tries to build up its business. (The company did not say.)

"We are very excited to announce this new business combination," explained Bruce Acacio, Infinite Software's chief executive officer, in a statement announcing the controlling stake in Roundstone Systems. "Infinite is quickly becoming the fastest growing enterprise partner for HP in California. The Roundstone team adds great depth and knowledge of both the Bay Area market and HP's most sophisticated servers."

Infinite Software did not divulge how many employees Roundstone had, but did say it was keeping everyone on staff and would operate it as an independent entity--something hardware vendors like in their resellers. The company did not say how much it paid for its stake in Roundstone, or what that stake was, either.

Back in early 2008, when Infinite Software was touting its partnership arrangement with HP, which wants to use the Infinite iSeries and Infinite zSeries rehosting environments to move AS/400 and mainframe customers off those systems and onto Unix boxes made by HP, announced that it had acquired another HP reseller, Altos Technology Group. Altos is an HP enterprise business partner located in Sacramento, the state capital. The financial terms of the Altos acquisition were not made public, just like with the Roundstone deal.

Infinite Software is a public company, by the way, and its stock is traded on the over-the-counter "Pink Sheets" stock market under the symbol IFSC. As of the market close on Friday, the company had a market capitalization of just under $6 million. The company does not report quarterly financial figures in any of the stock databases I have access to, so I can't tell you how much money it makes.

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