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Claudia Imhoff

Welcome to my blog.

This is another means for me to communicate, educate and participate within the Business Intelligence industry. It is a perfect forum for airing opinions, thoughts, vendor and client updates, problems and questions. To maximize the blog's value, it must be a participative venue. This means I will look forward to hearing from you often, since your input is vital to the blog's success. All I ask is that you treat me, the blog, and everyone who uses it with respect.

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About the author >

A thought leader, visionary, and practitioner, Claudia Imhoff, Ph.D., is an internationally recognized expert on analytics, business intelligence, and the architectures to support these initiatives. Dr. Imhoff has co-authored five books on these subjects and writes articles (totaling more than 150) for technical and business magazines.

She is also the Founder of the Boulder BI Brain Trust, a consortium of independent analysts and consultants (www.BBBT.us). You can follow them on Twitter at #BBBT

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Another company bit the dust today as Pitney Bowes announced it was buying up the rest (90%) of Firstlogic in a deal valued at $50.3 million. One can't help but wonder why Firstlogic would agree to this...

First Pitney Bowes bought Group 1 -- another data quality vendor -- last year. Why do they need yet another one? Certainly Firstlogic fills in some holes that were missing in the Group 1 offering like data profiling but it seems they could have created that function for a lot less than $50 million.

And speaking of the $50 million, Firstlogic had annual revenues last year of $55 million. It has NO debt. So why such a low ball offer? The purchase price comes up to be a 1.0 multiplier -- that is, Pitney Bowes paid exactly what Firstlogic had as revenues for last year. This is remarkably low for a software company of Firstlogic's caliber. Generally the multiplier is anywhere from 3 to 10. And it is especially surprising since Firstlogic is having a better year this year than last. Sounds to me like there is more to this story than meets the press coverage.

What does this mean for the data quality industry on the whole? It may be very good news for the few remaining independent data quality vendors like DataLever and DataFlux. Competition will surely heat up for these companies. Secondly, to have such a large company (Pitney Bowes is a $50+ billion company) will certainly put a brighter spotlight on the overall data quality industry.

What will happen to Firstlogic remains to be seen. The press releases state that the company will start off as a wholly-owned subsidiary of Pitney Bowes. Whether this will continue into the future remains to be seen. My bet is that it will be subsumed completely by Pitney Bowes and the company as such will disappear.

I wish my friends at Firstlogic all the best in what must be an uncertain time for them.

Yours in BI Success,


Posted September 1, 2005 1:50 PM
Permalink | 5 Comments |


Yes - quite weird that they were bought out. I can't help but feel that FirstLogic may have been looking for a parent to compete effectively with Trillium and their parent Harte-Hanks.

Well Claudia, it seems that most of data quality vendors are now part of a big vendor family: Firstlogic and Group 1 - Pitney Bowes, Ascential - IBM, Dataflux - SAS, Trillium - Harte Hanks. One can wonder if there will be enough room for the remaining independents.

It's interesting to see that the real path down which Pitney Bowes chooses to tread is apparently unknown - The majority of our recent (last 6 years) takeovers have been the result of the need to bury the Pitney Bowes brand name - the days in which PB made/sold quality machines are long gone, and as such purchases of the likes of SECAP have been nothing more than an increasingly desperate marketing ploy to hide the third rate products on sale from this source.

In recent months the decision has been made to outsource the production of an already underperforming machine (DI200) to China, with a consequent rise in production cost from $800 to $1400. Fortunately there were still a few British jobs that could be flushed away to cover up the gross incompetence of the american commodities decision makers - 80+ at the moment, but of course no price is too high to cover the incompetence of an American halfwit.
Any potential shareholders should be aware - the rest of this sad little companies production is due to be outsourced to China within the next 2 years, and since the people handling this project are no more talented than a troupe of monkeys, this is not a time to invest. PB is going out of business (in manufacturing terms), and will soon be no more than a labelling facility for 3rd and 4th rate import parts.
If PB still seems like an investment opportunity, I wish you the best of luck.

A lot of people are scratching their heads trying to work out why Pitney Bowes should feel they need two data quality software suites in their portfolio, but I don't think that it spells the end for independent vendors.
Indeed, industry analysts have reacted positively to the entrance of new players, such as Datanomic (http://www.datanomic.com), who bring a new approach and new technology to solve data quality problems that extend well beyond the traditional name and address space.

The FTC gave close scruntiny to this deal and had requested additional information. After reviewing that information, they requested more information. Both Pitney Bowes and Firstlogic are walking away from the deal.

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