Last week came the announcement that Boston-based search company BAInsight had been acquired by Upland Software. BAInsight was founded by Guy Mounier and his colleagues in 2004 and was initially focused on adding functionality and significant value to the early versions of Microsoft SharePoint up until SharePoint 2013. At this point Microsoft started to enhance the functionality that it had inherited from its acquisition of FAST Search and Technology in 2008. It was in 2010 that Jeff Fried joined the business as CTO and Vice-President of Engineering from a similar position in FAST Search/Microsoft. His arrival marked the start of a more apps-based strategy for the company, which became to be widely respected for its connector applications.
With Jeff’s departure in 2018 to move to InterSystems and out of the search business the company seemed to me to lose its momentum and focus. Over the last few years the marketing focus has been on providing a federated search portal and on offering a Google-like experience for enterprise search. The problems it faced were that federated search seems wonderful in theory but an absolute nightmare to implement and although many executives seem to think that what their organisation needed was just Google there was little clarity from the the vendor as to just what a Google-like experience would bring to the user. The company also failed to clarify the extent it remained a SharePoint add-on or had its own indexing and query management technology.
BAInsight never developed any significant line of business outside of North America and that meant it was not an attractive option for European-wide or global customers. Because of the comparatively small size of the company it did not appear in the Gartner and Forrester reports, which limited its visibility to the CTO sector.
According to Upland Software the purchase price paid for BA Insight was around $33 million in cash. This works out at a multiple of between 5 and 8 of EBITDA, a low value for a software company. Upland expects the acquisition to generate annual revenue of at least $8.7 million, including at least $7.5 million of recurring (i.e., license) revenue. With around 50 employees that is only $150k per employee, again quite a low number though not as low as Coveo.
To quote Rod Favaron, President of Upland
“Our acquisition of BA Insight was driven by our customers’ needs, specifically in the business services, life sciences, and legal industries, where knowledge workers are spending wasted hours using ineffective enterprise search tools trying to track down the right documents to do their work. This is because most enterprise search technology does not connect to all relevant sources, is generic in its taxonomy when it should be specialized, and never gets better. BA Insight solves these major search challenges facing specialized knowledge teams today.”
Straight out of the BAInsight marketing pitch!
However, just where BAInsight will fit in is difficult to see. Upland is a $300M company with 30 product lines and with growth of just 4% over the past financial year, with a forecast of 6% growth in the forthcoming financial year. Somewhat underwhelming for a business that operates in the digital workplace market. Whether BAInsight retains its brand identify or moves to being a search platform for the Upland product stable remains to be seen.