November 14, 2005
Wind2 Acquisition Adds Revenue and Technology to Deltek
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Susan Smith - Managing Editor


by Susan Smith - Managing Editor
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About this Issue….


Welcome to AECWeekly! In an interview this week with Eric Brehm, executive vice president of Herndon, Virg.-based Deltek, AECWeekly discussed Deltek's acquisition October 3rd of Wind2, which added approximately $10 million in revenues and will strengthen the enterprise resource planning vendor's position in the marketplace. Wind2 has been a long time “somewhat friendly” competitor of Deltek in the A/E market on the low end, where Wind2 is typically sold to smaller firms. The Wind2 acquisition also adds more than 3,000 customers to Deltek's existing base of 8,000 customers.


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AECWeekly examines select top news each week, picks out worthwhile reading from around the web, and special interest items you might not find elsewhere. This issue will feature Industry News, Acquisitions/Agreements/Alliances, Announcements, Awards, Implementations, New Products, and Upcoming Events.


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Susan Smith, Managing Editor


Industry News

Wind2 Acquisition Adds Revenue and Technology to Deltek

By Susan Smith



In an interview this week with Eric Brehm, executive vice president of Herndon, Virg.-based Deltek, AECWeekly discussed Deltek's acquisition October 3rd of Wind2, which added approximately $10 million in revenues and will strengthen the enterprise resource planning vendor's position in the marketplace. Wind2 has been a long time “somewhat friendly” competitor of Deltek in the A/E market on the low end, where Wind2 is typically sold to smaller firms. The Wind2 acquisition also adds more than 3,000 customers to Deltek's existing base of 8,000 customers.


Click to EnlargeWind2 Acquisition Adds Revenue and Technology to Deltek.
Brehm has been with Deltek since he came with the 1998 acquisition of another company, Harper and Shuman, and has some insights on how the company integrates an acquisition into its culture. What is interesting about Deltek is that they continue to enhance, sell and maintain the product, for as long as customers want to continue with it.


1) Is Deltek ultimately planning to integrate the Wind2 technology into its own line of products?

Yes, the Wind2 Award and FMS products will continue to be maintained and supported as Deltek products. In addition, as part of the Deltek family, customers will have the ability to choose from a number of parallel Deltek products, including Deltek Vision, a fully integrated Web-based solution designed specifically for professional services firms.


2) What, if anything, does the Wind2 product line offer that Deltek does not?

There are key features in Wind2 Award and FMS that expand Deltek's ability to meet the needs of the markets we serve. For example, FMS has a robust collections module. There are a number of these types of features that will be incorporated into Deltek Vision so that Deltek clients have even more options than exist today.


Wind2's product FMS is a Windows-based product client server, not web based at all. From a technological perspective it is much more like our Advantage product which is also a window-based client server product. From a functional perspective, the FMS product is a bit richer than our Advantage product but not nearly as rich as our Vision product line. FMS concentrates mainly on project accounting, and some product management capability. But when you look at the Deltek products you have Advantage at the low end of the spectrum which is just project accounting and Vision at the higher end which not only has project accounting but resource planning, project management, client relationship
management, proposal automation, document management, etc., more of a complete business process automation system for a typical architectural or engineering firm.


3) Would you say this was an acquisition to acquire the competition and its customers or to acquire technology that would enhance the Deltek product line?

Deltek decided to acquire Wind2 to expand our reach in the professional services and A/E markets. Rather than competing with redundant development efforts, the leaders in these markets are now joined to provide more features and innovation to more than 9,000 clients in this space. In fact, combined, Deltek and Wind2 represent 81% of the Top 500 Design Firms as ranked by Engineering News-Record, and 83% of the Zweig White Hot Firm 100 Winners for 2005.


4) What percentage of Deltek's customers are A/E companies?

Around 75 to 80 percent.


5) In how many situations is Deltek asked to integrate its products with existing A/E CAD products, or does this happen at all?

This happens often. Deltek is among other vendors in the industry that are working to bridge the information divide between business systems; production systems, such as CAD; and support systems such as plotters, printers, scanners and so on.


6) If this is the case, how is that accomplished?

Deltek embraces a technology foundation that leverages web services to allow firms to more easily integrate out applications with other systems. For example, our VisionXtend platform includes a web services API and workflow engine that allow firms to extend the application beyond its original boundaries to interface with other applications within their firewall as well as information sources outside of the firm, thus creating a virtual ecosystem of information.


7) What do you see as the future of Deltek?

As we've done with other companies and product that we've acquired, we will continue to enhance and support and sell and maintain the FMS product for the foreseeable future. As an example of how we manage acquisition products, Deltek acquired a company called Harper & Shuman in 1998 by Deltek because Deltek wanted to get into the A/E market and Harper & Shuman was the market leader at the time. It was acquired, its premier product was Advantage, which had first been introduced in 1997 as our first Y2K compliant product. Now seven years later, Deltek is still selling, maintaining, enhancing and supporting the Advantage product line. We have a similar strategy for the Wind2 FMS product.
As there are approximately 3,000 clients using the FMS product (which is being renamed Deltek FMS), we will continue to enhance that product because we want to support the choice those 3,000 clients have made.


Those clients will now have more choices because they can look at other Deltek products, including Vision, which is advanced from a technological perspective. It is web services based, advanced from a functional perspective, but we're not going to force any clients to move in that direction. If they want to stay where they're at, we'll happily support them on the FMS product.


At the same time we are adding to Vision those features in FMS that are missing in Vision. We've already begun training a subset of the development group that we acquired with Wind2 on the Vision architecture. We've already begun designing some of those features in Vision, and we're also looking at designing a data conversion utility that will convert FMS data into Vision for those clients who are interested in making that move.

We have somewhere in the vicinity of 9,000 A/E firms. The other markets we serve such as management consulting firms, services firms, federal government contractors, non profits, are easier to quantify, and in each of those markets there are better statistics from organizations like Gartner and IDC. But those same organizations tend to not have great statistics about the A/E community. They ask us and how many firms we serve and we tell them 40,000 in the U.S. and Canada, that's not counting single proprietorships.


8) What are some of your current product releases?

We are continuously developing new features and new modules of our products. We just recently just released a new document management module and a new purchasing module within the Vision product line. We actually are about to go to general release with our multi-currency module within the Vision product line which obviously opens us up to be a better supporter of the many global firms that we already have in our client base.


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