ARCAD Procures Funding To Fuel Expansion

December 13, 2017 Dan Burger

The financial incentives instigating investors to back companies that create software and provide services to the IBM i community continue to raise eyebrows and elicit surprise among those unfamiliar with the innovation taking place in the so-called legacy netherworld.

Another glimpse of this appeared last week when ARCAD Software announced it received a € 2.5 million ($2.95 million in US currency) investment from the European equity firm Alto Invest. ARCAD develops and markets DevOps and modernization solutions for platforms that include IBM i, Unix, Linux, Windows and z/OS. This is the first external funding ARCAD has received during its corporate history that includes more than 25 years in the IBM midrange market.

With the funds contributed by Alto Invest, ARCAD intends to accelerate its commercial development in the United States, Europe and other international markets–Asia Pacific being one of those targets. According to CEO Philippe Magne, ARCAD will add sales and presales people throughout the world and further develop its partner channel.

The company’s research and development area will also benefit from the new influx of capital. Magne says there are strategic alliances that require R&D investments to create consistent solutions for customers. He mentioned a partnership with Docker as one example.

ARCAD specializes in automated, tool-based collaboration among developers, testers, operations, and end-users.

“Of all the investors we met, Alto Invest is the only one to have paid so much attention to the human aspects of the company,” Magne says. “This has created a major differentiating position. Their excellent track record in the field of software was also a very strong argument for us.”

Alto Invest is an equity investment firm — part of the Eiffel Investment Group — that specializes in innovative European small to midsize enterprises. It is invested in more than 140 SMEs and manages around €1.3 billion for institutional and private clients.

“We were seduced by the quality of management, the traditionally US-dominated niche market on which ARCAD has been historically based — namely the modernization of the legacy IT systems — and the international position of the company from which it generates more than 60 percent of its turnover,” says Olivier Tanneveau, associate director at Alto Invest.

ARCAD is heavily invested in DevOps and agile development with a multi-platform and open source software emphasis. It automates key phases in the DevOps cycle such as source code management, release management, regression testing, and data masking.

For IBM i shops that have been using change management software for years, DevOps looks very familiar. Both improve quality and lower risk. And both make use of a framework and collaborative achievements.

The major distinction for DevOps is that the collaboration involves a much wider universe of contributors. It takes into account other IT platforms and blows up the individual siloes by integrating tools and processes. And it further integrates IT and business with incremental improvements and enhancements continuously tested and put into production.

In mid-2016, ARCAD introduced software called DROPS that was designed to support continuous integration and delivery of new applications — including mobile and open source code management — and new operations by providing release-status information.

It was the latest piece in the ARCAD DevOps software suite. DROPS is a single tool that allows companies to orchestrate release management across multiple platforms that include IBM i, z Systems, Linux, Windows, and Unix. It promotes change agents across those systems from a single, automated tool set and also automates and streamlines application testing of cross-platform processes, another bottleneck that DevOps targets for elimination.

Looking to the future, Magne suggests ARCAD will be soliciting additional funding sources calling it “most likely” and “based on opportunities that may arise.”

Based on what has occurred in the recent past, we should expect more opportunities to arise. Observers of the IBM i market have seen mergers, acquisitions, and investments in an assortment of software and services vendors including Vision Solutions, HelpSystems, Fresche Solutions, UCG Technologies, Infor, UNICOM Global, and HiT Software.

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