UCG Becomes The Guardian Of Contract Management
June 4, 2018 Timothy Prickett Morgan
The small and medium business market for systems has always been larger than the AS/400 and its progeny, and even if the AS/400 loomed larger in decades past, it has been a long time since people in the IBM i market thought that everything can and should be done on the platform. Some applications work just fine running alongside the AS/400 and its integrated database, and other applications are freestanding and complementary.
Jim Kandrac, the founder and president of UCG Technologies, the IBM i system reseller located outside of Cleveland, Ohio, that is best known for its VAULT400 cloud backup software and which just opened up a subsidiary in Canada late last year to take on the IBM i market locally, has always wanted a software business of his own. Kandrac has re-engineered what was once called United Computer Group three times in three decades, and with the acquisition of Contract Guardian, a contract management system that was spun out of an accounting firm, he finally has a set of software that he controls. UCG Technologies has been a reseller of ERP software from Vormittag Associates, Inc., (VAI) for many years, and that has been the fourth pillar of its business alongside the VAULT400 backup and disaster recovery, IBM Power Systems sales (in myriad guises way back to 1987, predating the AS/400), and cybersecurity. While UCG Technologies will continue to service customers who use the VAI ERP software and will maintain a good relationship with Vormittag, Kandrac tells The Four Hundred that his company will no longer actively sell ERP software.
This has less to do with the ERP software market than it does with Kandrac wanting to control his own destiny.
“As a partner of IBM, we are selling hardware,” Kandrac explains. “As an ISV, we did a private label license of the Evault suite, which is now Carbonite, and that is our VAULT400. We always wanted to own and develop a solution, and so we bought Contract Guardian, the whole company and its intellectual property, because it plays in markets that we really see as increasing: healthcare, SaaS, cloud, HIPPA compliance, and contract management. This is one of the proven solutions in its niche already, and for a decade we have been doing backup and disaster recovery for them.”
Contract Guardian has been a product of Rippe & Kingston, itself founded in Cincinnati, Ohio, back in 1976 by George Kingston and Joe Rippe, who ran an accounting firm that eventually spread out to offer the Legal Management System, which as the name suggests was a suite of software for managing law firms – about 600 of them, in fact. That software unit was formed in 1982. In early May, the shareholders of Rippe and Kingston sold a majority stake in the firm for an undisclosed sum to ParkerGale Capital, a private equity firm based in Chicago that invests in profitable, founder-owned tech companies. (We have seen a bunch of such firms in the IBM i space in recent years, that is for sure.)
The acquisition of Rippe & Kingston has been in the works for months, in the wake of Joe Rippe passing away in July 2014. And that put the Contract Guardian piece of the business into play. Of the 150 or so employees at Rippe & Kingston back in the day, about 50 of them were on the accounting side of the business and about 100 of them were on the software development side, and Kandrac estimates that about 95 of these were working on the Legal Management System suite with the other five working on Contract Guardian. (The accounting part of the business was merged with Battelle & Batelle, a rival accounting firm located in Dayton, in 2013 and a year later the whole shebang was acquired by McGladrey, the fifth largest accounting firm in the United States that very much wants to move on up to the Big Four.)
“The Contract Guardian people are great technical people, but we are great at administration and operations, the sales and the marketing,” says Kandrac. “We feel that we can do a good job in growing and scaling that business. There is a great track record in getting clients in healthcare and recurring revenue, and we think it can really grow. This is a pretty big deal for me personally, after 30 years. As a founder, you start a business, you bootstrap it, you grow it. We have a solution, but it is really a private label license, and we write a big check and we pay a big royalty. This has allowed us to control our destiny a bit more. But still not fully. And when I started my business three decades ago, my number one thing was to control our destiny.”
Kandrac plans on keeping an office in Cincinnati for development and to do customer onboarding for the service, and will be hiring another half dozen or so employees to start peddling Contract Guardian, which is offered as a software service, not as a locally installed package. Contract Guardian is written in a combination of C++ for the backend and Python for the front-end, so there is no technical reason what it could not be ported to run natively on the IBM i platform. But that is not in the current plan.
Contract Guardian is not the first company that UCG Technologies has acquired. Back in January 2017, the company acquired E-Safe Technologies, a Pittsburgh, Pennsylvania, provider of IT services and an IBM i reseller was formerly known as Premiere Technologies. E-Safe was founded in 1989, just in the aftermath of the AS/400 launch, and had more than 250 customers located from Pittsburgh to the Great Lakes area.