Infinite Software Partners with HP, Acquires Altos Technology Group

March 3, 2008 Timothy Prickett Morgan

It has been a busy couple of weeks for legacy application rehosting environment provider Infinite Software, which you probably remember by its former name, California Software. Several weeks ago, Infinite Software announced that it had partnered with server and operating system maker Hewlett-Packard in an effort to offer customers with vintage RPG and COBOL applications running on AS/400, iSeries, and System i platforms the option of running that code on HP’s Itanium-based Integrity servers running HP-UX, Windows, or Linux.

And last week, Infinite Software, which is based in Laguna Niguel in southern California, announced that it has acquired Altos Technology Group, an HP enterprise business partner located in the state capital of Sacramento. The financial terms of the Altos Technology acquisition were not made public. (Altos Technology is privately held, and Infinite Software’s stock is traded on the over-the-counter “Pink Sheets” stock market under the symbol IFSC and is not compelled to provide financial details.) But Bruce Acacio, Infinite Software’s chief executive officer, did give some indication about how big of a deal the Altos acquisition is in terms of how it will impact the company.

“We are very pleased to announce this new business combination,” Acacio explained in a statement announcing that Infinite Software had attained a controlling interest in Altos Technology. “For some time, we have sought the right team to move forward with our plans for to grow our infrastructure business around HP Enterprise Servers. We can now say that we have found it. The combination of Infinite Software and Altos Technology Group will build on the existing relationship both companies enjoy with HP. Altos Technology Group is one of HP’s fastest growing partners. The combined entity is expected to more than double existing revenues.”

Acacio did not say how much revenue that would be or whether the deal would be accretive to profits; he did say that Altos Technology would be operated as an independent division of Infinite Software and that no staffing changes were anticipated by the companies in the wake of the deal.

Outside of California, Altos Technology may not be well known. The company is a gold-level HP business partner and sells and supports HP-UX and OpenVMS platforms (basically the Integrity server line these days) as well as HP’s BladeSystem blade servers running Microsoft‘s Windows and VMware‘s Virtual Infrastructure hypervisor and tools. (Presumably Altos Technology is also able to peddle X64-based ProLiant servers, but its Web site makes no mention of it.) The company is also a certified Microsoft gold partner as well as a partner of VMware and Citrix Systems. HP’s certification says that Altos Technology has certifications from it to do business in state and local governments and in educational institutions as well.

In mid-February, Infinite Software had designated HP as its preferred partner for platforms on which to run its Infinite iSeries rehosting environment for RPG and COBOL applications originally created for the OS/400 and i5/OS platforms made by IBM. HP, like rival Sun Microsystems, has been chasing the mainframe for more than a decade, and has similarly found taking on the AS/400, iSeries, and System i midrange a bit more of a challenge.

“For obvious reasons, HP is excited at the prospect of taking share away from IBM,” says Acacio. “A lot of HP’s focus has been on mainframe replacements and its partnerships with Micro Focus, Clerity Solutions, and a few others. But HP didn’t really know what to do with the System i platform.”

To that end, Infinite Software and HP are co-marketing the Infinite iSeries rehosting tools on a stack of software supported on HP iron. Specifically, that means HP-UX, Windows, or Linux operating systems, .NET or Java application languages for the Web front end, and SQL Server or Oracle databases for the back end of RPG and COBOL applications that have been rehosted. While the Infinite iSeries software can run on X64 and Itanium processors, the deal with HP stresses Itanium-based Integrity rack servers and Itanium-based blade servers, although customers can use ProLiant blades if they choose a blade form factor for their rehosting environment. “We are Integrity friendly, and we want customers to be using OpenView, Systems Insight Manager, and the other HP enterprise tools.” Acacio says that given the scalability and reliability that AS/400, iSeries, and System i shops are used to, Infinite Software is strongly recommending that customers deploy Infinite iSeries on HP-UX on Integrity servers.

The Infinite iSeries software is currently deployed at around 3,000 companies worldwide, according to Acacio, and is used predominantly to rehost RPG applications. But there is a smattering of COBOL among the customer base, too. On a development system, Infinite iSeries costs $19,999 for a single developer seat, with additional programmer seats costing $9,999 a pop. On the deployment side, it costs $250 per concurrent user on the system to deploy the rehosted applications running atop the Infinite iSeries emulation environment. Acacio says that the Infinite iSeries compilers and hosting environment is a blend of its own Baby/400 rehosting platform and the Unibol/400 tools it acquired in 2000. (UniComp, the parent company of Unibol, went into bankruptcy liquidation last August, according to Infinite Software, which says it now is supporting customers who were using Unibol’s Elite 36 emulation tools for System/36 applications.) Acacio says that the resulting stack of software can scale and runs fast.

“We have looked at deploying as many as 20,000 users on a single system,” he says. “And we run a bit leaner and faster than the same code runs on a real System i. And that is not because we are brilliant, but because we don’t have 30 years of baggage in our code.” He says that the main reason why companies are rehosting RPG and COBOL applications has nothing to do with the code, but rather the databases behind the code. “Just as the System i is centered around the database, so is the decision to leave it.” Meaning, companies want to standardize on databases, and with DB2 for i5/OS only available on the System i server, a cross-platform product like an Oracle database or a more widely deployed (but equally proprietary) product like an SQL Server database (which only runs on Windows), can and does win out in a lot of head-to-head competitions with DB2 for i5/OS where companies want to pick one database for their applications.

As for the familiar criticism that Infinite Software is in some way hurting the System i market–a label that all rehosting environments since there were back office systems have to bear–Acacio has the same answer that other companies have used to make their case before the installed base they are trying to attract and to convince to leave that installed base. “We love the environment so much that we allow it to be deployed elsewhere,” says Acacio. “I could argue that we love RPG more than IBM does.”

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