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August 26, 1996


By CBR Staff Writer

From Software Futures, a sister publication

Software testing vendor Pure Software and configuration management specialist Atria Software started dating last spring and finally decided to take the plunge and get hitched 2 months ago. Clare Haney talked to the happy couple about their likely future together .

Don’t they say the third time’s the charm? asks Paul Levine, president and chief executive of Atria Software, describing over a year’s worth of discussions that finally resulted in the recent unexpected marriage (CI NO 2,929) between configuration management vendor Atria headquartered in Lexington, Massachusetts and current high flyer in the ASQ (automated software quality) arena Pure, hailing from Sunnyvale, California. According to Levine, the two companies have been eyeing each other up since spring 1995 when discussions were first held between the two management teams. Both companies felt a merger would be a great opportunity, but it was too soon in each other’s history to know how it would play out. So we went our separate ways. Although Atria had been a public entity for a few years, Pure was only in the early stages of its run-up to going public, which ambition it achieved in August last year. So, then in the fall of 1995, there was another discussion. The emotions were not quite right, says Levine. More of the dating dance was needed. Then came the third set of meetings in April and May this year which led to last month’s wedding announcement. In hindsight we waited just a little too long, but the dance was necessary to get to know each other. We wanted to get to the stage where the merger felt like an old comfortable shirt.

Pooling of interests

So how do the companies view their partnership? We don’t see it as testing bolstered up by configuration management or vice versa, explains Levine, But as populating an immediately adjacent point in the landscape. Software developers need to manage multiple tests in a test management environment. The transaction has been accounted for as a pooling of interests and when it closes, subject to SEC approval, probably in early September, Atria shareholders will end up owning approximately 55% of the combined company, with Pure shareholders holding the remaining 45%. The new company has already been christened with the somewhat unwieldy title of Pure Atria with a staggering market value of $1.7bn, as of June 5, 1996. Pure and Atria are around the same size of company and both reported 100% increases in their revenues last year. In Pure’s case, this was largely due to two major acquisitions bulking it up, in the shape of $11.9m software quality assurance specialist Santa Clara, California-based Qualtrak in March 1995 and then $74m load testing software vendor Performix of McLean, Virginia in November last year, which led to a year-end loss of $6.4m, but revenues up 100% on 1994 to $44m. Atria meantimes had revenues last year of $40m, up 93% on the previous year. Currently Atria employs 250 people, while Pure has 320 staff. Levine doesn’t anticipate any redundancies to result from the merger. On the contrary, both companies are intending to hire a further 80 to 100 more employees each in the next six to nine months. There is one area of overlap. Both companies currently have their own defect tracking software, Pure via its Qualtrak acquisition with PureDDTS (distributed defect tracking system) and Atria with ClearTrack. Atria is being very pragmatic, saying that since its offering only debuted in the first quarter of this year, it intends to migrate any existing ClearTrack customers over to PureDDTS which has been around for the past four or five years. However, Levine believes pieces of ClearTrack technology can profitably be incorporated into future versions of PureDDTS, especially in the areas of user interface design and customization facilities.


Turning to customers, Pure has more than 4,000, while Atria has approximately 800 customers. Off the cuff, Levine reckons that out of those 800, well over 60% of them have ended up somehow touched by Pure products. So what do such users think of the merger? We spoke to Chuck Farinelli, software configuration management architect at manufacturing software vendor Marcam, based in Newton, Massachusetts. The company uses both PureDDTS and ClearCase in the development and tracking of the status of its object-oriented Proteon product. It’ll be a win/win situation for us, because we’ll be going to a single supplier, says Farinelli. My only concern is that I’m happy with the current support levels I get from both companies separately and I’m just hoping that the combined company support will be guaranteed there. Atria’s Levine is in no doubt that the biggest challenge Pure Atria will face is managing its growth. The way forward, he believes, is in the business units already established within Pure where authority and autonomy are devolved throughout the company. So smiles all around for the wedding pictures. But how will Pure Atria’s Windows and Unix competitors respond to the merger? Will they perhaps go out and make acquisitions of their own? One thing’s for sure. They definitely won’t be showering the happy couple with gifts and confetti!

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