Rocket Buys Zephyr For Terminal Emulation

February 6, 2012 Alex Woodie

Rocket Software consolidated its position in the market for terminal emulation software last week when it acquired Zephyr Development Corp., a Houston, Texas, company that developed the PASSPORT line of terminal emulation and integration solutions for accessing and modernizing applications running on z/OS, IBM i, Unix, and OpenVMS servers. It was the second IBM i-related acquisition for Rocket in a month, and sends a strong signal of support for the platform.

Zephyr was a small, feisty company that delighted in taunting its larger competitors in the mature terminal emulation space and pressing customers to question the value they get from the likes of Attachmate and IBM, the undisputed giants of terminal emulation. The company, which was founded in 1985, made migration from Attachmate’s EXTRA! and Reflection products and IBM’s Personal Communications (PCOMM) core staples of its marketing efforts, and would often sell its PASSPORT products as part of a larger migration kit. Indeed, Gregg Ledford, a Zephyr co-founder and formerly its CEO, once said he considered Zephyr to be an “Attachmate displacement company.”

Rocket–like all terminal emulation providers not named Attachmate or IBM–has heavily leaned on a replacement approach to selling software as well. The company claims its BlueZone line of emulators (obtained via the Seagull Software acquisition in 2006) can save customers 50 to 90 percent in maintenance fees compared to other emulation suites.

Now, with the duo of PASSPORT and BlueZone rocking the emulation world, Rocket will have two fairly young and flexible emulation product sets (as measured by the relative difficulty that vendors showed in getting their legacy code bases to support new Windows OSes such as Vista and Windows 7) to attack the large-but-stationary market for emulation tools. The Massachusetts company will likely market the BlueZone products more strongly to IBM i shops, owing to that product’s stronger 5250 heritage; Zephyr supported the midrange server but had a stronger business selling 3270 solutions to mainframe shops.

The Zephyr name will disappear as Rocket focuses on PASSPORT as another solution in its Application Development, Integration, and Modernization business unit. Rocket says it intends to continue developing and adding new features to the PASSPORT products (including PC to Host, Web to Host, and Host Integration Objects), and will keep the PASSPORT development teams in Houston and the United Kingdom intact. Zephyr’s founders, including Ledford and David Muck, have elected to leave the business, Rocket says. According to Hoovers, Zephyr was owned by its employees.

Financial terms of the deal were not disclosed. Rocket (which is a private company that’s backed by the private equity firm Court Square) would not share any additional details, including the number of employees or customers that Zephyr had. Rocket said Zephyr had “hundreds” of customers, and pointed to a list of 115 customers on the Zephyr web site with Fortune 200 names such as Bank of America, Comcast, Lockheed Martin, Progressive, Verizon, and Xerox.

This was the second acquisition of the year for Rocket, a 900-person company that was founded in 1990 primarily as an OEM developer for IBM, but which has grown into a $300 million-plus company (estimated as of 2009) as the result of 30-plus acquisitions over the years. The revenue figure has undoubtedly grown thanks to Rocket’s December 2011 acquisition of the iCluster high availability business from IBM for an undisclosed amount. Rocket also bought the IBM i lifecycle management tool vendor Aldon less than a year ago (also for an undisclosed sum).

Rocket’s position in the IBM i marketplace (and its maintenance revenue stream) has been bolstered by the Zephyr, iCluster, and Aldon acquisitions, but Rocket has many other irons in the IT fire, and insists its specialty remains software development, a claim bolstered by the fact that many of the executives of acquired companies stay on as heads of Rocket’s various business units, brands, and software development labs.

The vendor’s web site now touts 110 products across 13 brands, including Aldon; Arkivio for storage and archive software; AS for mainframe business intelligence software (formerly ASTRAC); BlueZone; CorVu for business performance management and BI; Folio/NXT for electronic publishing; iCluster; MainStar for mainframe systems management tools; M204 for mainframe data management; Networks for network management; Seagull; Servergraph for backup tools; and U2, for the UniVerse and UniData “multivalue” database managements Rocket acquired from IBM in 2009. When PASSPORT is tucked into place, there will likely be 113 products across 14 brands.