With more than 25 years in rental software, Jack Shea, Solutions By Computer CEO, is often described as the “godfather” of equipment rental software, and his company, Solutions by Computer, has more users in the rental market than any other software company. A few days after SBC was acquired by Constellation Software, RER editor Michael Roth spoke with Shea about the company’s future plans.
RER: The two most common types of acquisitions are these: One where the new owner acquires a company, the former owner stays on for a little while to ease the transition and very quickly disappears. The other is where the new owner acquires the company, keeps the management team and infuses it with capital for growth. How would you describe this acquisition?
Shea: In our case, we have a very supportive parent in Constellation who has a deep interest in the rental industry software market. They have chosen to enter a new software arena using a proven “buy and build” model that uses multiple growth channels. Their model has an excellent track record and a strong focus on customer service; these two qualities were very appealing to us.
For Solutions, the transaction represents an opportunity to capitalize on our strengths within a new framework of resources. Constellation took the time to learn about our business and the needs of our market. They respect the unique aspects of the rental business. All of Solutions’ key executives in service, development and operations are remaining with the company for the foreseeable future. I have been phasing myself out of day-to-day operations for some time and expect this to continue.
Were you seeking a source of capital for a period of time? Did you feel it would be difficult to grow Solutions without the capital support of a larger entity?
Constellation first contacted Solutions a few years ago and again last summer to express an interest in entering the rental market via acquisition. They did not have a timetable they needed to meet, and we were not actively seeking an owner or partner. As often happens with these transactions, we engaged in friendly, informal dialogue over time and eventually reached a place where the stars aligned for everyone involved. As a result, Solutions now has more options to build on our leadership position, and Constellation has a quality platform from which to build it.
Are there certain synergies with Constellation and Solutions? Will the new ownership provide support to allow Solutions to continue to develop Enfinity and CounterPro?
The fact that Constellation shares many aspects of our business philosophy was important to us. They have a history of longevity in vertical markets, and — more important — a leadership sensibility. As I mentioned earlier, they place a lot of emphasis on the customer service experience. Constellation is also committed to the ongoing sales and development of our Enfinity and CounterPro systems. Solutions will continue to have a full-time software development staff in Springfield under the management of Roy Perdue, who has more than 30 years of experience creating market-leading rental systems.
The press release about the acquisition mentions an enhanced customer service infrastructure. Can you elaborate?
The transaction is less than a week old, but we’ve already begun the process of evaluating potential improvements to our support infrastructure, which will become more definitive in the coming weeks. A few changes have been made already, mainly to Help Desk procedures. Other changes are in the review stage, although they’re definitely on the front burner. It’s an exciting prospect to be able to apply the innovations and best practices that Constellation has accumulated by serving system users across a wide scope of vertical industries. It would be impossible to gain access to this kind of information as a private company.
The Solutions by Computer brand will continue?
Yes, Solutions by Computer built a strong brand over more than 25 years of sole focus on rental. There are no plans to change it.
What are some of the new developments you expect to see in rental software in the coming years?
For several years now, rental system development has moved in the direction of integrating third-party software that can improve risk management, scheduling, planning, marketing and other areas of rental business operations. I expect this trend to continue. Third-party capabilities can exponentially leverage the wealth of information captured by a rental system as a byproduct of transactions. My prediction for another area of development would be customer identification. There are emerging technologies that will be able to clamp down on fraud and identity misuse, which continue to be a challenge for rental operators.
Are there certain functionalities or areas of development that your customers have wanted, that will be more likely as a result of this acquisition?
The plan is to continue on our current development paths for both systems, CounterPro and Enfinity, without any interruption or shifts in development strategy. We have a good sense of what enhancements will be most useful to our users, in part because we have communication channels like our sbcXchange virtual community that capture customer suggestions. If our development focus changes over time, it will be because it is customer-driven.