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June 9, 2003 — (WEB HOST INDUSTRY REVIEW) — Hosting automation firm SWsoft (sw-soft.com) said today it had acquired
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Plesk (plesk.com) and Yippi-Yeah!
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E-Business GmbH (yippi-yeah.com), both
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automation companies, for an undisclosed amount. Terms of the deals were not
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disclosed.
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The combined company claims to have trumped Ensim as the largest provider of
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software automation products in the world, with 30,000 servers running SW
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Soft software, and 3,000 Web hosts using company’s products. According to
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Ensim, the company has 12,000 customers, but wouldn’t elaborate whether
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those are servers under management or stand alone Web hosts to prevent
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uneven or unfair comparisons.
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According to SWsoft, both the Plesk name and Yippi-Yeah!’s Confixx brand
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name will be retained.
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Insiders that track the hosting software industry expect SWsoft and Plesk to
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reach profitability by year-end at the latest, with Yippi-Yeah! further
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enhancing SWsoft’s financial performance. SWsoft and Plesk were apparently
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very close to breaking even at the time of transaction, and will fix their
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balance sheet by using each others’ resources for growth, according to
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sources.
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“We would have been profitable right now if it weren’t for [the] Feature
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Price disintegration, since they were our biggest North American revenue
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generator,” said Serguei Beloussov, SWsoft co-founder and chief executive,
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who will retain his title following the transactions. Feature Price was sold
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to Atlantic.Net in late May after experiencing customer service issues and
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apparently ceasing support operations.
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There are several synergies between SWsoft and Plesk, including the fact
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that both outfits have R&D facilities in Russia and headquarters/sales
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operations in the United States. The combined company has moved its
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headquarters to a new office in Washington D.C., has shut down Plesk’s
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Virginia headquarters and plans to convert SWsoft’s Silicon Valley location
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into a sales office.
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According to the companies, Plesk chief executive Dmitri Simonenko will
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retain an executive vice president position with SWsoft, with certain
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projects becoming cross-pollinated by both teams. Yippi-Yeah! will retain
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its German facilities, with a plan to rename the firm SWsoft Europe some
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time in the future.
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Due to a recently announced reseller agreement, Plesk and SWsoft have
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already started merging their product line. According to the companies, no
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products are planned for retirement, and the companies said there will
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initially be no changes to product names. On the product line level, SWsoft
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now has two control panels, a virtual private server in Virtuozzo and a full
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business cycle hosting automation product in HSPComplete.
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SWsoft’s acquisition spree was made possible in part by S&W Group, the
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holding company behind SWsoft, which is engaged in a variety of businesses
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in South East Asia and Eastern Europe/Commonwealth of Independent States.
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Some of the companies which make up the holding include Acronis, a storage
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and PC utilities software company; Solomon Software, an ERP software
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marketer as well as sales and development organization for Microsoft; and
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several companies engaged in TV and other consumer electronics manufacturing
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under LG and Rolsen brands. The latter group of companies generates $300
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million a year and has been founded, originally managed and is currently
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owned by SWsoft chief executive Beloussov. The business is expected to reach
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a billion dollars in revenues within the next few years, allowing executives
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like Beloussov to fund strategic investments into niche industries like
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hosting automation.
