Pitney Bowes sells out

Pitney Bowes has sold its software solutions business to Syncsort. This is kind of weird. It basically takes Pitney Bowes out of the software business – the only part of the company with significant growth potential (even if the company has never been able to exploit that potential as well as it should) – and puts it back into the mailroom. On the other hand $700m is not to be sneezed at and you could argue that it’s good for shareholders: a nice pension scheme. In any case, it means that Pitney Bowes will no longer be of interest to us here at Bloor Research.

Syncsort, on the other hand, is another matter. What’s it gaining? What used to be MapInfo is the biggest piece of the pie, along with the location intelligence and location-based datasets that Pitney Bowes has developed. MapInfo and ESRI used to be the big beasts of the geo-spatial world but MapInfo has rather got lost while in Pitney Bowes. It is to be hoped that Syncsort can resurrect it.

Syncsort also gets Pitney Bowes’ MDM solution that has historically been poorly targeted. The point about this is that it is based on the Neo4j graph database, which makes the offering particularly suitable for environments where you have non-hierarchical data. However, Pitney Bowes’ focus on customer data and analytics has meant that it has targeted its MDM offering at customer data rather than product information management where non-hierarchical data is a) more prevalent (think bills of materials) and b) more of an issue. Again, it is to be hoped that Syncsort can actually develop this in a sensible direction.

As for the rest of the Pitney Bowes software, this falls into two categories: customer engagement solutions and data management software. The latter, which includes both data quality and data integration capabilities, overlap with Trillium and Syncsort itself, but it helps to gain market share. How much of the customer engagement software is relevant to Syncsort is another matter: while some of it may be complementary, some of it would seem to be outside Syncsort’s traditional market. Unless the company intends to expand/change that market, which seems doubtful (but see below), then I can see some of the less relevant products either being sold off or ditched.

The big question is: what is Syncsort becoming? Following on from its acquisition of Trillium it was itself acquired by Centerbridge in 2017 along with Vision Solutions, plus follow-up purchases of Metron, EView and Trader’s. So the company is on a spending spree. And this raises various question marks. Will this acquisition of Pitney Bowes give the company indigestion? Is it becoming like the CA (now Broadcom) of yesteryear? Does Centerbridge have more money than sense? Does it have a strategy? If so, what is it? Taken in isolation I can see the sense behind a combination of Syncsort (as was), Trillium and Pitney Bowes, but the logic behind the rest of it eludes me.