Rocket Celebrates 35th Anniversary As Private Equity Owner Ponders Sale

April 28, 2025 Alex Woodie

Rocket Software has come a long way since Andy Youniss and Johan Magnusson Gedda founded the company in Youniss’ Boston garage in 1990. Today the company counts more than 12,000 customers, including a large number of IBM i shops, and reportedly has a valuation of around $10 billion. Could the company’s 35th anniversary of its founding be a good time for its current majority owner, Bain Capital, to sell?

Youniss started building what we now think of as Rocket Software in 2000, when he completed the first of what would become dozens of acquisitions. Over the years, there would be several IBM i acquisitions, including application modernization tools from Seagull in 2006, the software change management tools provider Aldon in 2011, and the iCluster high availability business from IBM in 2012. (Big Blue had previously acquired DataMirror, iCluster’s creator, in July 2017.)

In 2018, Youniss sold a big chunk of the company to Bain Capital Private Equity to help fund Rocket’s growth. By the time that Youniss stepped back from day-to-day operations in 2021 and handed the reigns over to former Hewlett Packard Enterprise vice president Milan Shetti, the company had completed 45 acquisitions and grown to 2,500 employees, or “Rocketeers.”

However, Rocket’s acquisitions didn’t stop when Shetti took the chief executive officer seat. Perhaps the biggest acquisition occurred in June 2024, when it bought about half the Micro Focus business from OpenText in a deal valued at $2.275 billion. That acquisition brought Rocket the Application, Modernization, and Connectivity (AMC) business from Micro Focus, which included the RUMBA and Reflection emulators formerly developed by NetManage (long a Rocket target) and WRQ/Attachmate, respectfully. That led Rocket to its February consolidation of the half-dozen or so emulators it owned, and the launch of its new flagship terminal emulator, Secure Host Access.

The acquisitions have bolstered the company’s size and reach across IT, industries, and geographies. As Rocket celebrates its 35th anniversary this month, it boasts that it counts 43 of the Fortune 50 as customers. Total headcount has growth to more than 3,200 Rocketeers and the customer count is north of 12,500, including many IBM i shops.

While Rocket could not provide IT Jungle the number of IBM i shops it counts as customers, its commitment to the platform couldn’t be bigger, according to Puneet Kohli, president of Rocket’s Application Modernization business.

“When Andy founded the company 35 years ago, he started out by focusing on mainframe and modernizing of the application on Z,” Kohli says. “We continue to build on that theme of how do we help our customers, who are on a pretty robust platform, Power and IBM i. It’s such a robust and stable platform, but how do we help these customers continue to have scale, continue to have modernization, continue to have relevance, and leverage their investment in it? So that’s been our focus since we’ve acquired those assets, and we continue to evolve and build on top of that.”

Rocket continues to invest in all of its IBM i offerings, from LegaSuite (Seagull) to Rocket DevOps (Aldon) and Rocket iCluster (the former Datamirror product), Kohli says. All of the IBM i products – including the recently launched Secure Host Access line of Telnet emulators – have been enhanced to improve the user experience and the user interfaces, he says.

“Green screens are amazing and we all love green screens, but the next generation that’s coming in, I’m not really convinced that they are going to be that happy with green screens,” Kohli tells IT Jungle. “All our products have a Web UI, they all have material design from Google embedded in them, and have a much more friendly user experience, especially for the next gen that’s coming in and working on these products.”

While Kohli couldn’t share exactly what’s coming next, he dropped a few hints. Rocket is looking at how it can incorporate GenAI and agentic AI into its IBM i product lineup, he says. The company is also looking at how it can help customers work with free-form RPG, he added. “That’s sort of a project that we’re working on,” he says.

The advent of GenAI and coding copilots that spit out COBOL, Python, and SQL – and soon RPG when IBM finally rolls out its Code Assist product – has put IT at a crossroads. Kohli, who started his IT career as a COBOL programmer and worked with punch cards, has an interesting perspective on it.

“I would say we’ve come quite a bit from there,” Kohli says, referring to the days of punch cards. “Today we can literally talk to the computer and let it do all the programming for us with the GenAI. That’s a pretty interesting leap that the computing industry has taken. Even today, we are we are working on applications which are written in RPG, written in COBOL, and we are modernizing them. So there’s something to be says about the robustness and the stability of what was built 35 years ago compared to what is being built today in the modern world.”

The macro trends around GenAI appear to be boosting the market for IT tools. In February, Reuters reported that Bain Capital was considering selling its Rocket stake thanks in part to a boost in company valuation to a reported $8 billion to $10 billion.

“Bain’s deliberations come as the artificial intelligence boom is forcing large corporations to increase their technology spending to upgrade outdated business software and automate more routine tasks,” Reuters reporter Milana Vinn wrote.

If the early potential for AI to help with some of the longstanding challenges facing legacy systems – including code explanation, code generation, and application modernization – turn out to be real, then the valuations of many software vendors targeting legacy platforms like System Z and IBM i will likely increase even more. As Kohli points out, there is a lot of value still in these systems, which is why they are still around half a century (or more) after they were first created, and why companies continue to use them.

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