SWsoft Buys Plesk, Yippi-Yeah! Automation Firms

• By theWHIR.com , June 09, 2003

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June 9, 2003 -- (WEB HOST INDUSTRY REVIEW) -- Hosting automation firm SWsoft (sw-soft.com) said today it had acquired

Plesk (plesk.com) and Yippi-Yeah!

E-Business GmbH (yippi-yeah.com), both

automation companies, for an undisclosed amount. Terms of the deals were not

disclosed.

The combined company claims to have trumped Ensim as the largest provider of

software automation products in the world, with 30,000 servers running SW

Soft software, and 3,000 Web hosts using company's products. According to

Ensim, the company has 12,000 customers, but wouldn't elaborate whether

those are servers under management or stand alone Web hosts to prevent

uneven or unfair comparisons.

According to SWsoft, both the Plesk name and Yippi-Yeah!'s Confixx brand

name will be retained.

Insiders that track the hosting software industry expect SWsoft and Plesk to

reach profitability by year-end at the latest, with Yippi-Yeah! further

enhancing SWsoft's financial performance. SWsoft and Plesk were apparently

very close to breaking even at the time of transaction, and will fix their

balance sheet by using each others' resources for growth, according to

sources.

"We would have been profitable right now if it weren't for [the] Feature

Price disintegration, since they were our biggest North American revenue

generator," said Serguei Beloussov, SWsoft co-founder and chief executive,

who will retain his title following the transactions. Feature Price was sold

to Atlantic.Net in late May after experiencing customer service issues and

apparently ceasing support operations.

There are several synergies between SWsoft and Plesk, including the fact

that both outfits have R&D facilities in Russia and headquarters/sales

operations in the United States. The combined company has moved its

headquarters to a new office in Washington D.C., has shut down Plesk's

Virginia headquarters and plans to convert SWsoft's Silicon Valley location

into a sales office.

According to the companies, Plesk chief executive Dmitri Simonenko will

retain an executive vice president position with SWsoft, with certain

projects becoming cross-pollinated by both teams. Yippi-Yeah! will retain

its German facilities, with a plan to rename the firm SWsoft Europe some

time in the future.

Due to a recently announced reseller agreement, Plesk and SWsoft have

already started merging their product line. According to the companies, no

products are planned for retirement, and the companies said there will

initially be no changes to product names. On the product line level, SWsoft

now has two control panels, a virtual private server in Virtuozzo and a full

business cycle hosting automation product in HSPComplete.

SWsoft's acquisition spree was made possible in part by S&W Group, the

holding company behind SWsoft, which is engaged in a variety of businesses

in South East Asia and Eastern Europe/Commonwealth of Independent States.

Some of the companies which make up the holding include Acronis, a storage

and PC utilities software company; Solomon Software, an ERP software

marketer as well as sales and development organization for Microsoft; and

several companies engaged in TV and other consumer electronics manufacturing

under LG and Rolsen brands. The latter group of companies generates $300

million a year and has been founded, originally managed and is currently

owned by SWsoft chief executive Beloussov. The business is expected to reach

a billion dollars in revenues within the next few years, allowing executives

like Beloussov to fund strategic investments into niche industries like

hosting automation.

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