Uniface BV A Supplemental Company Review by Bloor Research International Ltd

Vendor background

Uniface B.V. has a long history, over several decades, since its initial inception by Inside Automation in the Netherlands, as a high productivity 4GL. It became Uniface B.V., back in the 20th century. It was then acquired by Michigan-based Compuware Corp. in 1994, but product development continued in Amsterdam and it was recently sold again, in 2014, to Marlin Equity Partners. It is now Uniface B.V. again, a privately-funded Dutch company. It has always prided itself on supporting its existing customers using older versions of its products while modernising its product range as technology evolves and this company ethos has been maintained throughout its changes of ownership. It claims, in 2014, to have some 250 partners and 1,600 customers.

Uniface was the first Compuware product set up as an independent Compuware business unit by Aad van Schetsen when he was Senior Vice President and Managing Director at Compuware. It became a growing and profitable business operation in its own right, even before the Marlin acquisition. Van Schetsen remains as President & General Manager of Uniface. He worked for Compuware in a variety of sales and management roles from 1992 and prior to joining Compuware, van Schetsen worked in multiple roles for the Canadian software company Cognos. He holds a software engineering degree from Technical University Delft and lives in the Netherlands. The CEO of the new Uniface is Jim Byrnes. He represents Marlin Equities’ interests and continues Uniface’s welcome customer focus. As he says: “More than anything, I care about our customers’ success and the relationships we’ve built with them. Only when our customers are successful are we successful”. The management team includes most of the team from the old Compuware days. Adrian Gosbell, for example, continues with Uniface as Vice President Product Management & Marketing. Originally from the U.K., he has been living in Australia and the Netherlands and has been working with Uniface, both for customers and Compuware, since 1992. Maarten van Leer remains with the company as Vice President Technology and has worked for Uniface since joining as a software engineer in 1985. He has overseen the modernisation of Uniface’s development environment with the ‘software factory’ approach and introduction of Agile practice.

Uniface has a partner ecosystem, PartnersUnited. An important part of servicing this is Uniface’s new public-facing Directory, a virtual resource and collaboration centre for Uniface partners, on Uniface’s new website. It once had a strong channel of its own too; this was dismantled under Compuware, but is now being rebuilt.

Customers

Uniface currently (2014) has about 1,600 customers; and 250 partners and resellers – who are also treated as customers. Uniface is currently building a strong global partner organisation, with local partners that want new customers themselves – and which have local knowledge and networks in places like China and South America.

Uniface has its own established customers as well, of course, and the systems Carphone Warehouse in the UK runs on, for example, are written in Uniface (see www.uniface.com/wp-content/uploads/2014/10/cs_carphone.pdf). This is partly because Farhad Bastani, Head of Retail Development at Carphone Warehouse, finds Uniface more productive than competing solutions using, say, Java; and partly because Uniface can still support its ageing Open VMS technology.

Uniface has many other examples of large enterprise customers; in 2013, for example, IFC Global Logistics in Australia won the “Information Management Award”, given to businesses and products that have made significant achievements with information technology in the supply chain and in the logistics industry, for a Uniface application (http://investor.compuware.com/releasedetail.cfm?ReleaseID=815102). There is a long list of customer case studies at http://www.uniface.com/customers/.

Customers trade with Uniface because, firstly, it is far more productive of production business outcomes (not just lines of code) than conventional development environments such as Java (Eclipse) or .NET (Visual Studio). Secondly, Uniface has a strong reputation for supporting its customers and bringing them up-to-date with the latest technologies at their own pace. For its existing customers, Uniface is acutely aware that many of them are running business-critical applications and are sometimes tied into old hardware and corresponding versions of Uniface and supports them through the modernisation process. This, in part, explains its good record for customer loyalty.

Partners

Uniface Partners are an essential part of Uniface’s new go-to-market strategy, as exemplified in its Partners United Program. It has seen a 13.8% growth in Application Partners business in its 2014 financial year and it has, it says, improved its working relationships with its key partners and is making new commercial opportunities for its VAR partners.

Global partners include VBT (Turkey); Wizrom (Romania); Everest Computers (UAE & Dubai); Mobilne (Croatia); Techshire and TCS (India); ONE1 (Israel); Hongyi (China), Mainsoft (Brazil, Peru, Chile); Softline (Russia). They obviously give Uniface a global reach and access to local business networks, without Uniface itself having to build a presence in each country. This approach also helps to insulate Uniface from any political issues with, for example, doing business with an EU company in Russia.

Licensing

Uniface licensing is managed with the Uniface Distributed License Manager (DLM). This is a server which can supply licenses to clients on request, so they don’t need to be held locally, and Deniz Yugnuk (Head of Sales, which includes Licensing) is particularly proud that Uniface’s VAR customers love the benefit from DLM and use it to manage their own user licensing.

Uniface runs a range of very flexible licensing models but can’t offer “pay per usage” models yet (it would like to, and is looking at these; but they are on the road map rather than in development).

For client/server Uniface development it offers a choice of “named user” licensing, with a flexible “first come first served” policy for which names are actually licensed up to the user limit (this is decreasing in popularity); and normal concurrent licensing. Then you need similar runtime licenses for deployment.

If you hit your concurrent user limits, the next user can’t log in. However, Uniface offers temporary (short-term) licenses, on request, which you can use while sorting things out. There is even an emergency license (even shorter term), users can download from the web, if they hit an “out of hours” peak.

Uniface Application Servers are licensed per server, per CPU per core, and this also applies to Web Application Servers. If (as with Uniface 10.01) you are developing only Web or virtualised Cloud applications, there are no runtime charges, you just pay for the Web Application Servers you need (and also for the development licenses needed to build the application before deploying it).

There is the usual issue that if your Uniface usage hasn’t changed and you upgrade the hardware its application server runs on, then your licence fees will go up, because of the extra cores that will come with most hardware upgrades. In a virtualised environment, you don’t really know what resources you might be using at any time. Yugnuk told me that there is then a “robust conversation” with the customer in which he will point out that customer business is growing and the end user experience is benefiting from those extra cores – but if it’s really unclear whether the customer is making greater use of Uniface than before, Uniface would offer an “amicable solution”.

Bloor’s opinion is that such a flexible approach should work well-enough; but that “pay per usage” licensing. with its associated agreed and transparent metrics, is the way forward, especially in web and virtualised environments. Trial licenses can be downloaded from the Web.

VAR’s and business partners just pay negotiated royalties to Uniface and can license their products to their customers in any way they like. As noted, however, many of them choose to use the Uniface DLM to do it.

Customers who fall outside the current licensing model, using old versions of Uniface, are tolerated (partly because they may not realise that there is an issue, in some parts of the world), as long as they aren’t calling on Uniface support and don’t need to upgrade. However, such customers are operating in a high risk situation themselves and Uniface is quite adept at introducing the current licensing model in return for support; and also help in migrating such systems onto modern (and more resilient and better supported) hardware.

Competitors

One consequence of Uniface’s modernisation is that Uniface can no longer be considered a niche player and therefore will, potentially, have to compete with every IDE out there. Uniface is a more mature product than most, if not all, of its competition, but Bloor considers that its most interesting competitors are probably the much younger high-productivity PaaS vendors such as OutSystems Platform, Mendix and even Salesforce1. Some of these may not be able to achieve the “heavy lifting” where Uniface has always demonstrated competence – but that may not always be the point.

Financial Information

Uniface is owned by Marlin Equity Partners (MEP), which is a global private equity firm operating throughout North America and Europe. Since 2005, it has completed over 70 acquisitions and currently has over $2.6 billion of committed capital from its blue chip institutional investor base. Its other successful growth acquisitions have achieved from 25% to over 400% growth under MEP.

Uniface sees an emerging trend for Cloud and Mobile Enterprise Application Platforms (MEAPs), with tools supporting rapid development being primary drivers for spending; these don’t seem to have become commoditised yet, in the Enterprise space, at least. Gartner reported a world-wide application development market of $9.0B in 2012, with projected CAGR rising from a historical 2% to 14% (in the 2012-16 period) so Uniface sees its aspirations for growth as extremely realistic.

Uniface has always been profitable with a strong, consistent performance (a continued growth in New License Revenue over the last 5 years, with better than 95% maintenance retention ). Its revenue streams are beginning to change, now that it is an independent company, however: it anticipates that 60% of its new license revenue will come from Application Partners, with 80% of new business deals being closed by partners & distributors.

Current Issues

Uniface has always supported its customers on older platforms, recognising that it is used to write business critical applications and that sometimes technology or regulatory constraints don’t allow easy upgrade to the latest release. However, this provides Uniface with a support overhead and, more importantly means that it has customers using unsupported – and possibility financially inappropriate – licensing models. This is an issue that Uniface must address and is addressing; it has a support team which will not only help a customer move to a currently supported Uniface release but also help it modernise the associated hardware platform.

There is also the possibility that its market for high-productivity development tools will commoditise more rapidly than it expects (as happened with Java tools such as Compuware’s OptimalJ) but we think that this is unlikely, as so much of what the Enterprise buys is support and a long-term partnership, rather than just technology.