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Microsoft Buys Boise's ProClarity: Software Giant Says It Will Keep Offices, Employees in Boise

Posted on: Tuesday, 4 April 2006, 09:00 CDT

By Melissa McGrath, The Idaho Statesman, Boise

Apr. 4--Microsoft Corp. said Monday it will buy ProClarity Corp., a local software company, and keep the company's operations in Boise. The acquisition will give Microsoft a foothold in the Treasure Valley and could boost the local technology industry, economists and business leaders said.

Privately-held ProClarity, which designs analytic software that helps businesses file and sort large amounts of data, will become part of Microsoft's Office Business Applications division in about a month. The acquisition is subject to regulatory approvals, and company officials said they expected the deal to close in four to six weeks.

Both companies declined to disclose the financial terms of the deal.

ProClarity, which employs about 100 people in Boise and another 40 in Europe, has worked with Microsoft since 1995 when ProClarity started. ProClarity's software runs with Microsoft's business intelligence programs, including Excel, SharePoint and the upcoming 2007 Office package.

"(The acquisition) gives us the opportunity to impact so many more customers that we could not have reached on our own," said Bob Lokken, chief executive officer of ProClarity. "This is not only good for the company but good for the community."

Microsoft officials decided to keep the company's offices in Boise after the acquisition because of the local work force.

"This is a growing high-tech community, and we have the chance to tap into more talent," said Bill Baker, general manager of Microsoft's Office Business Applications group. He was in Boise on Monday to talk to ProClarity employees.

The Redmond, Wash.-based software company hopes to increase its presence in Boise after the acquisition, Baker said, but he said he could not give specific numbers for how the company expects to expand.

ProClarity was founded by three former Extended Systems executives and has grown to generate more than $20 million in revenues annually. ProClarity was first called Knosys Inc., but the company changed its name to ProClarity in 2001. Now, its name will be changing to Microsoft.

"It's obviously an enormous company with incredibly deep pockets, so having a foothold in the Treasure Valley probably opens up an opportunity for additional economic activity that would be connected with Microsoft," said Mike Ferguson, the state's chief economist.

Microsoft could expand the current work force at ProClarity or bring other companies here that want to work with the software giant, Ferguson said.

Other business leaders said this acquisition and Microsoft's decision to keep the ProClarity offices in Boise show that Idaho is a great place to do business.

"It validates that Boise is on the map with regard to a good place to start and build a technology company," said Mark Solon, managing partner of the venture capital firm Highway 12 Ventures in Boise.

ProClarity has more than 2,000 customers around the world, including AT&T, Hewlett-Packard Co. and The Home Depot. The company also works with local companies, such as Idaho Power Co., Blue Cross of Idaho and Healthwise. It is considered the largest pure software company in the state. Many of the other major high-tech firms, such as Micron Technology Inc. and HP, manufacture hardware.

"Micron and HP have IT departments bigger than ProClarity, but as far as a company dedicated to developing and selling software, (ProClarity) is the flagship company in the state," said Jefferson Jewell, who founded Kickstand, a networking group of entrepreneurs and tech executives.

Microsoft does not plan to cut any jobs or change management at ProClarity after the acquisition, company officials said.

Several of the local ProClarity employees said Monday they are excited about becoming a part of Microsoft.

"I definitely always wanted to work for Microsoft," said Sean Timm, 30, a software developer who has been at ProClarity for four years. The news didn't come as a big surprise to Timm, who said he had heard rumors circulating around the office for weeks.

Chad Nixon, director of the North American services and support division at ProClarity, said the acquisition was "going to happen sooner or later."

He said he is a little nervous about the changes ProClarity is going through, but added: "You can't waste time worrying about that."

Becoming part of Microsoft also will open up more career advancement opportunities that ProClarity employees didn't have before, Nixon added.

Jason Maynard, an analyst with Credit Suisse First Boston, wrote in a research note: "We think this is a good acquisition for Microsoft as it continues to build-out its business intelligence products."

Microsoft stock rose about 1.3 percent Monday to close at $27.56.

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Copyright (c) 2006, The Idaho Statesman, Boise

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Source: The Idaho Statesman, Boise

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