Verint to Acquire Rontal, Offer PSIMBy: John Honovich, Published on Apr 03, 2011
Verint has acquired Rontal Applications [link no longer available], an Isreal based PSIM provider. Verint will start providing its own PSIM offering based on Rontal's SimGuard. In this note, we analyze the fit and impact including sharing answers from Verint on our questions about the new PSIM offering.
While Rontal [link no longer available] is poorly known in North America, Rontal is roughly equivalent in size to companies such as Vidsys and Proximex who engaged in much heavier marketing.
Rontal's PSIM is named SimGuard [link no longer available], current version 4.7. Rontal claims a number of unique features [link no longer available] including: 3D GIS model integration, predictive simulations and cross camera tracking that "uses a scenario-oriented, path-prediction algorithm that enables SimGuard to visualize a suspect's actual pathway, and presents it on a 3D virtual-reality display of the site."
Verint reports that it will immediately start offering its own PSIM, which to the best of our understanding will start as a re-branding of SimGuard. Verint shared their PSIM marketing brochure [link no longer available] that provides an overview of their positioning. We find it to be a fairly common approach to PSIM positioning.
Verint reports that they will support a long list of 3rd party systems (mentioning Honeywell, GE, UTC and AgentVi as examples) but they emphasized that their ability to integrate with 3rd party systems using their open architecture is more important. We disagree. Everyone has some form of an 'open' architecture. The real value is having executed a broad range of third party integrations that can be used without additional cost, negotiation and risk. That noted, we do not know how good or bad Rontal's overall 3rd party support is.
Verint says the 'PSIM product is priced competitively, compared to other PSIM products. The actual costs for PSIM projects to the channel and customers depends on the scale and scope of the actual implementation.' This is as expected. Verint is not a company that tries to radically lower cost or expand the reach of offerings to the mass market. It's also likely not to be a significant change to Rontal's basic pricing approach.
An Isreal newspaper, Globes, is reporting that the acquisition price was for 'tens of millions of shekels.' Since a Shekel is worth roughly a US quarter, this would estimate the price paid at approximately $10 Million USD (or less). Globes also reports that Rontal's revenue in 2010 were $6.5 Million USD, the company was slightly profitable and employed 35 people. These estimates all appear roughly reasonable to us.
Since Rontal spent less on marketing than their PSIM peers, this may appear to have less of an impact than Orsus's or Proximex's acquisitions. However, all 3 acquisitions tell the same fundamental tale: PSIM independence is unsustainable (contrast this to the VMS software companies almost none of whom have been bought because they have been fairly to very profitable). On the positive side, as Rontal spent less on marketing, its return to investors are likely higher.
We anticipate Verint to treat Rontal like NICE treats Orsus. The PSIM solution will be built and marketed primarily around the company's existing products, customers and prospects.