RealPage CEO Steve Winn says pace of multifamily tech consolidation likely to continue.
New Carrollton, Texas-based RealPage is expected to announce its acquisition of Washington, D.C.-based EverGreen Solutions this week, RealPage CEO Steve Winn confirmed in an exclusive interview with Multifamily Executive today. One of the industry's leading tech consultancy and software implementation services firms, EverGreen is largely noted for its significant client base of Santa Barbara, Calif.-based Yardi Systems users. Yardi offers several applications that compete with RealPage products and services.
The EverGreen deal comes on the heels of Monday’s announcement that RealPage has also acquired San Diego-based senior living technology firm A.L. Wizard. Just last month, RealPage hired Mike Britti, a former TransUnion executive, as senior vice president of mergers and acquisitions, and the brisk pace of deals is a harbinger of additional consolidations on the tech side of the industry.
“We clearly want to continue to grow, and one way we do that is by seeking out those companies that are complementary to our strategy and add functionality or customers that we do not already have,” Winn says. “I suspect that you’ll continue to see a lot of activity in this area for RealPage."
As part of the EverGreen acquisition, RealPage has launched a Cloud Computing Division and is actively recruiting clients and third-party application providers to become certified partners and users of the RealPage cloud. Cloud computing is an "Infrastructure as a Service" (IaaS) technology trend whereby users are provided with access to applications via the Web and need not host or maintain systems on their own internal server networks. “Our data center supports tens of thousands of locations, and we manage hundreds of terabytes of data,” Winn says. “We are very good at hosting, and it occurred to us that many clients are hosting, for example, the Yardi Voyager application or the MRI accounting application and may not want to continue to host those systems themselves.”
Some Yardi users who are also EverGreen clients have expressed uncertainty about how the consolidation of the tech firms will affect their operations. EverGreen president and CEO Georgianna Oliver did not immediately return calls requesting comment.
Still, Winn says that integration of technologies via cloud computing could assuage those worries. In particular, Winn emphasized reduced hosting costs, real-time systems compatibility testing, disaster recovery assurance, SaS 70 type 2 audit compliance, and greater network speeds for users opting to host in the RealPage cloud.
“There has been some issue with the reliability of integration points between the two softwares,” Winn says. “We’re trying to address those concerns precisely with the cloud by creating a platform where owners and managers can rely on the functionality and stability of these integrations. The idea is to have a clearinghouse where at least we can certify those companies that elect to be cloud partners and pre-test integrations upon each new release of code.”
Although Yardi officials did not respond to inquiries requesting comment on the effect the merger may have, the company has nevertheless been embracing integration partnerships on its own, as well. On September 16, Yardi and The Rainmaker Group announced that they have developed a property management system (PMS) interface that will allow the functionality of Rainmaker’s LRO revenue optimization software via Yardi Voyager. The PMS is currently being piloted across Chicago-based Waterton Associates’ multifamily portfolio of 15,000 apartment units across 12 states.
Both the EverGreen and A.L. Wizard acquisitions represent new lines of business for RealPage, which hopes to immediately roll out increased functionality to A.L. Wizard users, including a general ledger accounts payable system, electronic payments, and risk mitigation screening and insurance offerings. Since RealPage has previously provided tech consulting services (notably via the December 2008 acquisition of the JPI resident solutions technology division), EverGreen is expected to play a larger role in development of the Cloud Computing Division.
“EverGreen has a large consulting practice with Yardi clients, and they will continue to provide those consulting services but will also be actively involved in helping third-party clients adopt the cloud,” Winn says. “The economy has clearly caused owners and operators to take a magnifying glass to their expenses and look for more efficient ways to manage their business. There is a clear trend away from hosting these complex systems in-house. The shift to cloud computing is a mega-trend in every industry, and it will be a mega-trend in multifamily, too.”