Neoware

» see neoware.com as it lived, on the wayback machine

~ the obit ~

Most companies start with a product and go looking for money. Neoware started with money and went looking for a product. Its own 10-K says so plainly: the company "formerly known as Information Systems Acquisition Corporation, was formed in November 1992 as a Specified Purpose Acquisition Company, the objective of which was to acquire an operating business in the information systems industry". It did an offering and then sat on the proceeds, waiting.

On 2 March 1995 it merged Human Designed Systems into a subsidiary, paying 2,810,000 shares and 618,200 warrants, plus 5.5 million dollars in cash. The people who had owned Human Designed came out with about 50.1 percent of the combined company, which tells you who really acquired whom. The shell renamed itself HDS Network Systems and now had a business: X Window terminals, and later the Java-flavored network computer.

Thin clients never came to Turkish homes in any form, and the reason was arithmetic rather than taste. A thin client assumes some server room elsewhere is paying for the real computer. In a country where getting any machine through the front door was the achievement, buying a deliberately empty one was never going to land. I only ever met the category professionally, which is the honest distance here: I know what these boxes were for, and I never wanted one.

~ the rap sheet ~

~ the other hds ~

The name HDS Network Systems lasted a little over two years, and it ended in a trademark fight the company lost on purpose. There was another HDS: Hitachi Data Systems, considerably larger. In September 1996 the two sides settled. The 1997 10-K describes the terms without decoration: the company "agreed to sell to Hitachi all of the Company's rights in the mark 'HDS' and to cancel certain petitions filed by the Company in the United States Patent and Trademark Office to cancel Hitachi's trademark registrations."

Stockholders approved the replacement name on 30 July 1997 and the company became Neoware Systems. Eight years after that, in December 2005, it dropped the second word and became simply Neoware, Inc. Later filings soften the episode into a technology licensing arrangement with Hitachi, which is how a company prefers to remember selling its own name, but the 1997 document is the contemporaneous one and it says the marks were sold.

~ the shopping spree ~

From 2001 onward Neoware bought the thin client business of almost everyone who gave up on it. Boundless Technologies and the Capio line in June 2001. The ACTIV-e Solutions consultancy that December. Network Computing Devices and the ThinSTAR range in March 2002. TeemTalk terminal emulation in July 2003, which could pretend to be more than thirty kinds of green screen. Visara International's thin client business in September 2004. Then a run of European purchases in 2005, starting with Mangrove Systems and Qualystem in France and taking in eSeSIX and its ThinTune line across Germany and Austria. In October 2005 it took TeleVideo's thin client business, and in November it bought Maxspeed.

The strangest part of the arrangement is in the 2005 filing, where Neoware admits it licensed its TeemTalk and Mangrove software "to certain of our competitors, including Wyse Technology, Hewlett Packard and VXL". It was selling software to the rivals it was fighting for shelf space, and one of them bought the whole company two years later.

~ sixteen twenty five ~

Revenue reached 107.2 million dollars in the year to June 2006, up 36 percent. The following year it fell 16 percent to 90.4 million, and the filing names the hole precisely: the top five US enterprise accounts went from 31.5 million dollars to 6.2 million in twelve months. That collapse is larger than the total revenue decline, because the small-business and distributor channels grew 19 percent while the big accounts walked. Five customers took 25.3 million dollars out. Everything else put about 8.5 million back.

HP signed on 23 July 2007. Neoware's stockholders approved on 27 September. The 8-K records the end to the minute: "As of 11:59 p.m. Eastern Daylight Time on September 30, 2007, HP completed the acquisition of Neoware through the merger of Merger Sub with and into Neoware." The merger subsidiary was called Narwhal Acquisition Corporation. Shareholders got 16 dollars 25 in cash, about 335 million dollars for the common stock, which HP's own release described as a 214 million dollar enterprise value net of cash. The 241 million figure that circulates is a transposition of HP's number and appears in no filing. There were 198 employees left.

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