For an Independent Software Vendor (ISV) operating in the fiercely competitive telecommunications industry, surviving the early years of life can be like negotiating a minefield. The difficulties are such that the majority of start-ups don’t reach adolescence (even when the underlying product idea is a good one). And of those who do, many more fall by the wayside often despite apparent commercial successes (sometimes due to difficulties fulfilling what initially appeared to be game-changing contract wins; sometimes due to the failure to find much-needed additional investment. There’s no shortage of reasons).
And then, there are ISVs who do complete the journey of maturation, establish themselves and their products, and in the process go from strength-to-strength. Only the best survive. Utel has now definitively crossed this threshold, with its recent acquisition by Alytic, a telecom investment specialist with a particularly impressive client list.
Superficially, such an acquisition casts two immediate positives. First, that a source of investment with a track record of success in the industry has identified the acquired company as a valuable addition (something worth investing in) to its portfolio. And second, because the investor likely brings something to the table that is invaluable to the future of the ISV: resources, experience, expertise. If “reaching adolescence” was the appropriate metaphor for an ISV establishing its presence in the market, then “marriage” is its equivalent at the point of acquisition; the now established ISV finding the right partner with which to drive future growth.
With Alytic, Utel appears to have found its perfect match (or perhaps it’s the other way around!) Why? For a start, Alytic, – and its own parent company, Arendals Fossekompani – bring more than 2,100 employees in 26 countries and over a century of commercial expertise and experience to bear on the future of Utel. All this comes allied to its well-established long-term investment perspective, a significant differentiator in a venture capital market often characterised by short-term thinking.
The significance of this differentiator can’t be underestimated. Alytic puts within Utel’s reach not only direct experience in the development of commercial enterprises over time but equally importantly a willingness to actively deploy its expertise on Utel’s behalf in the sort of measured and informed operational manner that will be necessary for the company to continue going from strength-to-strength.
Alytic also brings valuable synergies to Utel’s table, for instance in the area of analytics where the company has significant expertise. It focuses investments on companies that share common denominators such as technology and digitisation. This means its investments can capitalize on experience in transforming businesses like their own and in the process helping those companies to scale for the future.
CEO of Utel, Frode Gorseth (left), recognises that the acquisition primes his company for sustained growth in the coming years. He notes, “We (Utel) have built a leading position in the telecoms industry over the past two decades so a foundation for commercial success is well established. The challenge for us now is rapid growth likely characterised by continuing Product Development, international expansion, and expanded relationships with our Tier-1 customer base. Alytic and Arendal Fossekompani have a proven track-record of developing data-driven companies like ours to facilitate exactly the sort of steps Utel is now about to take.”
As Utel, post-acquisition, begins to accelerate its growth strategy and leverage its strong domain expertise, product platform and position within the telecom network industry, these would appear to be exciting times for both the company and its customers.