Progress To Acquire Allegrix

The Progress Company, a business unit of Progress Software Corp., Monday became the latest to pick the low-hanging fruit of the sagging application service provider market. Progress, a company that sells application development environments to independent software vendors, has agreed to acquire Allegrix Inc., a service provider that specializes in helping software developers ASP-enable their applications for hosting.

While Progress didn't disclose the terms of the transaction, the company says it's buying Allegrix to supplement the Progress ASPen Program, which it began two years ago to help ASP-enable independent software vendors using Progress' application-development tools. Of Progress' 2,000 independent software vendor clients, more than 300 are part of ASPen, including Skyward Inc. and Cutsey Business Systems.

Progress is looking to increase the revenue it derives from ASPen, says Bob Palumbo, VP of market development. "Our ISV clients have seen a 20% increase in revenue over the past year as a result of offering a hosted version of their software, and Progress shares in benefiting from this revenue growth," he says.

Adidas America will benefit from the Allegrix transition to Progress primarily because of the apparel manufacturer's use of Cutsey software, which it developed using Progress' tools. Adidas chief technology officer Dieter Schoenegger says he suspected for months that Allegrix would soon end its bid for a second round of funding and look to be acquired. He says, "Because Cutsey's application was developed using Progress tools, Progress is in an even better position than Allegrix was to manage our application service levels."