Neoware Buys Pericom for $9.8 Million

With acquisition, Neoware expands the reach of its thin client software into legacy applications.

Neoware Systems Inc. this week expanded the reach of its thin client software into legacy applications with its $9.8 million acquisition of Pericom Software from Pericom Holdings PLC.

The acquisition comes as Neoware and rival Wyse Technology Inc. push to expand their businesses beyond the thin client space.

According to Neoware Chairman and CEO Michael Kantrowitz, his companys current software enables its thin client terminals to access Windows- and Citrix-based applications. With Pericoms software, those same terminals will now be able to access applications running on mainframes and midrange servers as well as AS400, Unix and Linux systems.

"[The deal] provides us with legacy access," said Kantrowitz, in King of Prussia, Pa.

With the close of the deal on Tuesday, Neoware is now selling the software. By the end of the year, the company also expects to offer it bundled with its ThinPC software, which the company unveiled in May. ThinPC enables enterprises to lock down their desktop PCs and use them as thin client terminals, giving them access to server-based applications. With the software from Pericom—which will be marketed under the existing names of teemtalk, teemX and teemworld via Neowares Host Access business unit—those same desktop PCs will be able to access the same legacy applications, Kantrowitz said.

Pericom supplies about 85 percent of the terminal emulation software to the thin client space, he said. Neoware will continue to sell the software to other vendors, he said.

Kantrowitz said that while the thin client space is growing at rates of 20 percent to 30 percent a year, it accounts for about 1 percent of the worldwide PC market. The Pericom acquisition, coupled with the rollout of ThinPC, will enable Neoware to continue to target those enterprises that use PCs but may want to opt for the cheaper thin client architecture, he said.

Neoware officials said they expect to keep the Pericom employees, who will work in the companys Host Access business unit through a Neoware subsidiary. The company expects the new unit to be profitable immediately.

Both Neoware and Wyse, of San Jose, Calif., are branching out beyond thin clients. Both offer management software, and like Neowares ThinPC product, Wyse offers software called Alcatraz designed to turn desktop PCs into thin client appliances.

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