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SmartBear CEO Hints at Further Acquisitions Following Zephyr Deal


Boston-based Software QA automation specialist SmartBear this week announced that it has agreed to acquire Zephyr, a competitor deeply embedded in the Atlassian marketplace. It’s a deal that Justin Teague, the CEO of SmartBear, says will help the company stay ahead of competitors by building “the full set of tools” for software quality assurance that customers are increasingly demanding. And Teague is thinking of customers in the financial sector more than any others, because that’s where SmartBear believes the largest opportunity lies over coming years. “Because of both legacy tools and the progressive nature of the new tools BFSI companies are building, including customer-engaging tools like mobile, banking applications and others, they just happen to have a huge amount of engineers and projects in and around software development, compared to other industries,” said Teague. This, according to the SmartBear CEO, means that demand for QA in the sector is unlikely to slow down anytime soon. The purchase price of Zephyr, which is headquartered in San Jose, was not disclosed, but Teague confirmed that Francisco Partners, the venture capital firm that acquired a majority stake in SmartBear in 2017, will remain the majority owner of the combined firm. Zephyr’s branding will be retained, however, reflecting the success of its Zephyr for Jira tool which is the top grossing app on the Atlassian marketplace for developer tools and is used by 18,000 testing professionals to execute 40,000 tests. The success of Zephyr for Jira and its future role in the SmartBear toolbox is key to the acquisition, said Teague. “We are going to be the full-suite provider of these frictionless tools that teams can quickly deploy whether they’re working in a more traditional QA model; they’re in the process of adopting DevOps or they are moving towards full test automation,” said Teague. “Unlike competitors like Tricentis and Micro Focus, we don’t have big, heavy solutions, but rather a frictionless try-and-buy toolset,” said Teague. “That’s attractive to every test professional and engineer. This is the way that modern tools are evaluated and procured.” SmartBear has completed a number of acquisitions. It was originally formed as a merger between Smart Bear, AutomatedQA and Pragmatic Software in 2009, when the firm was majority owned by Insight Venture Partners. It bought out Eviware in 2011 for its SoapUI tool – an opensource web service testing application. This was followed by acquisitions of Spanish APM vendor Lucierna in 2013, opensource community Swagger in 2015 and then live webpage testing service in 2016. In May this year, SmartBear signed a deal to acquire continuous testing provider Hiptest. “Zephyr brings us 18,000 customers that prioritise quality as part of their software development,” Teague said. “We have many of the other leading tools for quality in the industry, across SoapUI and Swagger for API, TestComplete [an automated testing platform first developed by AutomatedQA in 1999] for UI and for web testing.” “This is an opportunity to take Zephyr’s integration expertise, combine it with some of our solutions and offer a complete toolset to those customers still in the process of figuring out how to solve their quality challenges.” Pursuing growth in Atlassian’s marketplace is also high on SmartBear’s agenda. “It’s one of  a few companies that have emerged as leaders in the market where software development and quality testing is happening. Atlassian clearly has a lot of momentum and will for a long time. We want to be part of that,” said Teague. He did not rule out the possibility of future acquisitions in 2019 and 2020 to further build SmartBear’s marketshare.  “We’re always looking for opportunities to fill the gaps in our portfolio and align with the market,” said Teague. “ If there’s a great up-and-coming technology or opensource tool [for sale], we’re always interested.”