TMW Acquires Innovative Computing Corp.

This story appears in the Dec. 7 print edition of Transport Topics.

TMW Systems last week acquired Innovative Computing Corp., combining two of the best-known names in the marketplace and expanding the reach of the largest provider of fleet-management software.

TMW, which is based in Beachwood, Ohio, acquired all the shares of privately held BetaZone Inc., Brentwood, Tenn., Innovative’s parent, on Nov. 24. The companies announced the deal Dec. 1 in a joint conference call; the cost of the purchase wasn’t disclosed. The combination is effective immediately.

The Innovative purchase “is about scale,” said David Wangler, president of TMW. “We think we can put a larger percentage of resources into creating and delivering solutions for the ICC product line than they’ve been able to do.”

Including Innovative users, TMW now has about 1,800 customers, the company said. That compares with about 550 customers for McLeod Software, the Birmingham, Ala., software provider that for years has competed with TMW for fleet business.

TMW said it had $65.5 million in revenue in 2007. That compares with $26.3 million in 2005, according to figures provided by the privately held company. The increase reflects revenue from acquisitions.

TMW has released revenue figures only for odd-numbered years between 2001 and 2007. The company did not disclose Innovative’s revenue.

McLeod said it does not disclose financial data.

Innovative has said it serves the truckload market almost exclusively. McLeod and TMW, meanwhile, have actively courted all types of carriers, in addition to logistics companies.

Buying Innovative adds that company’s flagship Innovative Enterprise Software product to TMW’s offerings of fleet-management software, which already include three other applications: TMWSuite, TL2000 and TruckMate. All three applications can be used by carriers, brokers and logistics companies. TMWSuite is the company’s leading product.

“Enterprise software” refers to applications designed to manage the flow of information throughout an entire company rather than individual departments. In the case of a carrier, enterprise software can combine accounting, billing and dispatch functions, for example.

Innovative is TMW’s third acquisition since Wangler took over as president in 2006. In 2007, TMW bought both Integrated Decision Support Corp. and TMT Software. A year before that, TMW brought Canada’s Maddocks Software into the fold.

Founded in 1969, Innovative is the oldest software provider focused on the trucking industry. The company began providing computer consulting services to trucking in the early 1970s.

TMW was founded in 1983 and bought by Wachovia Capital Partners and Peppertree Capital Management in 2005. McLeod went into business in 1985.

TMW said it plans to keep the Innovative brand intact, and the company will continue to develop and support Innovative’s IES, IES Access and Access Plus software.

“Anyone running a supported [Innovative product] will continue to get updates,” Wangler said. “We don’t sunset these products.”

Deborah Betancourt, Innovative’s vice president of operations, will stay on at TMW as vice president and general manager of ICC. She will report to Wangler.

Deborah Betancourt’s father, Ernie Betancourt — Innovative’s former president — has left the company to form QuikQ LLC, Franklin, Tenn., a company that will develop and market a cardless fuel transaction system called DFConnect (click here for related story).

Innovative distinguished itself among the providers of fleet-management applications by publishing its software exclusively on IBM Corp.’s System i operating system. Both the user-hosted and Web-based Innovative Enterprise Software run on System i.

Innovative also pioneered Web-based System i software for the trucking industry, Ernie Betancourt said. End users access this software through a Web browser, but the core application runs on the IBM operating system hosted by Innovative.

Ernie Betancourt has touted the System i operating system, formerly known as AS/400, as an alternative to operating systems such as Microsoft’s Windows. He said the IBM operating system is more stable and secure than its competitors.

System i is also less flashy than Windows, eschewing a graphical user interface in favor of a more Spartan text-based display sometimes referred to as “green screen” — a reference to older computer terminals that display only green text on a black screen.

TMWSuite is Windows-based, but the company’s TL2000 enterprise software, among other products, runs on System i. TMW also is steering research and development money into other System i projects.

On Nov. 23, one day before shares of Innovative’s parent company changed hands, TMW announced it would work with IBM on a pilot project to help software developers create more modern, Web-ready System i applications.

Dave Mook, who is TMW’s chief information officer and chief operating officer, billed the “application modernization pilot” with IBM as a way for TMW and its customers to protect “investments in System i (OS/400) applications and infrastructure.”

Some of the nation’s largest trucking companies are among those with investments in System i to protect, said a consultant who works with trucking companies on information technology rollouts.

“For the very large companies with multiple terminals, and hundreds of employees, trying to adapt to a new model just doesn’t make sense,” said Ben Becker, a consultant in Indiana.

Becker, the former chief information officer for truckload carrier Tradewinds, Arcadia, Ind., said green-screen systems have become engrained at many larger trucking companies because these carriers installed their IT systems when System i was the standard for fleet-management software.

The 300 Innovative customers TMW inherited through its latest acquisition include Crete Carrier Corp., Lincoln, Neb., along with  Swift Transportation Co. and Knight Transportation, both with headquarters in Phoenix.