Esker and Persoft Grow Together in Host Connectivity Market

In the competitive world of host access solutions, it helps to have the best of both worlds. Esker's latest acquisition gives the company just that, in a manner of speaking. With the acquisition of Persoft Inc., a Madison, Wisc.-based PC-to-host and Web-to-host connectivity solution provider, Esker merges the best of both companies' products as well as their geographic strengths.

While the Lyon, France-headquartered Esker enjoys a strong presence in the European market, the company sought out Persoft for its brand equity and indirect sales channel in the Americas. Although Esker has made some inroads into the U.S. market with its terminal emulation software, the company's success in the United States is not on the level of Persoft, according to Russ Teubner, president of Esker. As a result, "Esker views the merger as an opportunity to be able to obtain not only a quality company but a quality brand and a quality set of customers," he says.

Teubner is quick to point out, however, that while his company has acquired Persoft, the spirit of the transaction is very much a blending or a merger of two companies. "We value the contribution of the product line and distribution channels Persoft has developed," he says, adding, "Persoft customers should know that nothing will change in terms of [Persoft's] SmartTerm and Persona brands."

"Although there will be a global strategy for technology and future development, I think we'll continue to see activity as we would have separately, but taking advantage of the synergies we have," agrees Tom Wolfe, president of Persoft.

"This particular merger for Esker is another important step in getting mindshare and marketshare in the United States and really starting to establish some channels," says Stephen Drake, senior analyst with International Data Corp. (Framingham, Mass.). "Probably three-quarters of Esker's traditional host access revenue comes from Europe. This was a good decision for them in terms of being able to leverage what Persoft has already done [in the United States]."

When the acquisition is completed in August, Esker and Persoft will continue to maintain their individual products, according to Teubner. The research and development capabilities of the newly merged company will, however, benefit from an enhanced pool of resources. "Our objective at Esker is to build a company that can produce an ongoing stream of innovative connectivity products," he says.

"Both companies have strength in host connectivity, and host connectivity in today's world is moving more toward Web-to-host and legacy integration," Wolfe says. "I think you'll see developments coming largely in those areas from the combined enterprise." Wolfe points out the merger is not a case of one company acquiring the other simply to obtain technology and development resources. "It's a combination of two complementary companies, both very vital on their own, that nonetheless have a lot of synergy."

Having completed three acquisitions over the past two years--including a merger with Teubner & Associates as well as the acquisition of Alcom, a Mountain View, Calif.-based facsimile gateway company--Esker is positioning itself to challenge many of the leaders in the host connectivity market, Teubner says. One of the principles that will guide the merger between Esker and Persoft is that nothing will be done to disrupt relations with customers or channel partners. "We will work to make sure whatever integration efforts we do employ will not in any way disrupt the quality of the product or the support they get."

IDC's Drake points out that, while the combined forces of Teubner & Associates, Esker and Persoft may not steamroll over established competitors in the host connectivity market such as IBM, Wall Data Inc. or Attachmate Corp., this most recent transaction under the Esker banner does give the company a solid mix of Web-to-host, PC-to-host and system administration offerings.