Data Integration Specialist XAware Acquired by Sparxent

Published: May 11, 2009

by Timothy Prickett Morgan

When XAware, a maker of a Java-based, graphical data integration tool, took the open source plunge with its eponymous product in November 2007, it did not do so to gussy itself up to be acquired. But the vibrancy of XAware's open source development and distribution effort and its growing customer base were undoubtedly key reasons why Sparxent, a relatively new company that seems to have been established to buy up IT companies last August, bought XAware last week.

Sparxent, which is based in Salt Lake City, Utah, was founded in August 2008, right at the beginning of the most serious phase of the economic meltdown by Steve DeWindt and Dave Taylor and backed by vSpring Capital, a private equity firm that used to own the spun-out LANDesk operation that was sold to Avocent and that has invested in lots of tech companies over the years. (You can see vSpring's current portfolio of companies here; Sparxent is just one of the vehicles through which vSpring is making acquisitions.) DeWindt used to be director of worldwide reseller sales at chip maker Intel and was co-president of Computer2000 AG, a large wholesaler of PCs based in Germany that is now part of TechData. Taylor was part of the LANDesk team and followed the company around inside and outside of Intel until Avocent acquired it in April 2006 for $416 million. Both DeWindt and Taylor, like many IT vendors, want to chase business down in the midrange, by which it means customers with 5,000 or few employees.

On founding day back in August, Sparxent hung out its shingle as a LANDesk services and installation experts and said that it had acquired NetworkD, a value-added reseller based in Newport Beach, California, that has expertise in endpoint security, system lifecycle management, service desk operations, and IT optimization; it had over 6,000 customers worldwide at the time of the acquisition. On the same day, it bought Arbyte Group, a reseller and implementer of Microsoft's Dynamics AX application suite that is based in Moscow, Russia, and which serves customers in the Russian Federation and in the Ukraine. In October, Sparxent tapped Andrew Hyde, the chief financial officer at Salesforce.com, to be its CFO, and in November, it appointed Enrico Pesatori, the former president at fault tolerant computer maker Tandem Computers (part of HP) and for a time a hotshot at Digital Equipment (also part of HP) to its board of directors. Pestori also ran Compaq's enterprise services and support group in the wake of its acquisition of Tandem and DEC.

So XAware is now the third acquisition that Sparxent has made. And judging from the continued weakness in the global economy, it is fair to say that vSpring is shopping around for lots of companies to add to its portfolio. Now is the time to buy, after all--provided you have the cash, of course. Credit is just not going to cut it. vSpring has over $300 million in capital committed to its acquisitions and investments under its management, but has not said how big its war chest is or what its overall strategy is to turn Sparxent into a giant of the midrange. But it has said that it focuses on enterprise software, networking, communications, mobile computing, and security software, as well as having some expertise in and desire to invest in drug discovery and other companies engaged in medicine.

What seems clear is that XAware's ability to provide bi-directional, real-time integration between legacy applications and more modern Web front ends was important enough for it to be its first real acquisition in the enterprise software space. And it will build out from there, and as it does, we'll be keeping an eye on both Spaxent and vSpring Capital.

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