Modernization Projects On The Rise, Says Fresche Legacy
January 19, 2015 Dan Burger
Every IBM midrange shop needs one of these–a person who goes around the office from desk to desk explaining, in defense lawyer earnest and animation, the magnificence of this built-for-business computer system. What it can accomplish is worthy of attention. What is actually does is largely overlooked and what it doesn’t do is overblown and used to plan its execution. What can this system accomplish is the question that most business executives want answered.
Andy Kulakowski says more and more execs are finding the answer and moving their businesses forward. Kulakowski is intent on moving his company forward, and his company is heavily invested in IBM i.
You may not recognize the name of Kulakowski’s company: Fresche Legacy. It’s more likely you recognize the names of the companies Fresche Legacy has acquired. Last September, it snapped up the application tool maker looksoftware and one year before that, in September 2013, it purchased the code decoder company Databorough. These were added to the origins of Fresche Legacy, which began with an application tool company called Speedware. As a combo, these businesses form the underpinnings of a business designed for application modernization projects. Many people believe, and Kulakowski is one of them, that application modernization is the answer to moving companies forward.
In a phone conversation with Kulakowski last week, the president and CEO of Fresche Legacy told me additional acquisitions will be made to better position the company as end-to-end provider of application modernization/development tools and expertise.
“I see confidence growing in modernization,” he says. “The overall state of the market is positive. When economy gets better, confidence builds. Our new business reflects this and it tells me the IBM i market is ripe and that people are willing to invest in managing and maintaining their IBM i systems.”
As proof of this, Kulakowski points to the recently completed third quarter of Fresche Legacy’s business calendar. He described it as “very strong” with 37 new customers added to the roster. Those customers, all IBM i shops, were more or less evenly spread among three areas that Kulakowski defined as buyers of looksoftware licenses, buyers of Databorough software licenses, and companies contracting with Fresche Legacy for application support and discovery services. Discovery services means helping companies examine their existing application code and determining the best way forward, which is either modernize or rewrite.
“People taking modernization challenges more seriously,” Kulakowski says. “Companies are getting around to seeing how IT benefits from modernizing apps. A strategy to align with more modern business practices is part of this. Based on conversations with customers and prospects, I believe modernization projects were very difficult for IBM i companies to get their heads around. We help them bring innovation to their businesses.”
The top three challenges companies are facing, according to the feedback received by Fresche Legacy and reminiscent of the surveys conducted by looksoftware before it was merged with Fresche Legacy, are the recognized need to enhance at least a portion of the green-screen application inventory, how and where to start modernizing, and changing perceptions within their own organizations regarding the value IBM i brings to the business.
“I think these challenges, which come to our attention from conversations we have with our prospects and customers, indicate the IBM i shops are continuing to push themselves to bring innovation to their businesses,” Kulakowski says.
Another indicator Kulakowski uses to make his point is the increased level of participation in a series of modernization webinars that were held in December and early January. “A year ago we would get 25 registrations and 10 participants in our webinars and this series had 200 registered and 100 attending,” he says.
Much of the success–whether it relates to modernization webinars, an increased number of customers, or an increase in revenue–can be attributed to the addition of looksoftware in the Fresche Legacy family.
As a private company, Fresche Legacy is not required to release quarterly or annual financial reports, but Kulakowski says his company experienced a 20 percent growth rate in revenue in a year-over-year comparison of the first three quarters of 2013 versus the same period in 2014.
“We were a services dominated company before acquiring Databorough and looksoftware,” Kulakowski says. “Now our revenue mix has changed and the percentage of license and maintenance revenue is on the rise. Our services revenue, however, is also up.”
In the year ahead, mergers and acquisitions will be again rearrange the IBM i ISV community. Kulakowski expects his company to play a role in this once again.
“We are still very interested in mergers and acquisitions,” he says. “I think it’s a very good approach to helping the market by addressing their needs. Our vision is to offer a more complete solution and assisting with modernizing IBM i environments. There are other technology areas that would be useful for us to have and that would offer growth and strength in solutions we offer customers. Anything related to application management or modernization–source change management, cloud, analytics and mobile offerings fits the description of adding capabilities.”
“We continue to look at the market,” Kulakowski continues. “We have three active cycles–discussions with other IBM i ISVs–going on today. There is a segment that is interested in talking with us. Some have reached out to us. Within the vendor community there are companies looking for more creative ways to offer more creative solutions and a spirit of cooperation. Evolving in the direction of coming together is stronger than going it alone. We are not looking for companies outside the IBM I community. We look to be a better vendor in the IBM i community.”
Although Fresche Legacy generates approximately 85 percent of its revenue from the IBM i market in the United States, Kulakowski says it has a network of partners around the globe and is looking to advance in markets outside the U.S., with Germany, Japan, and Italy being at the top of his list.