Synchronoss Technologies Makes Strategic Moves to Boost Innovation

4/11/12Follow @jpruth

It can be tough for wireless carriers and users alike to sort out the increasingly complex mash-up of mobile devices and data. The ongoing releases of new handsets, software, and digital content makes it difficult to keep all the pieces working together smoothly. Synchronoss Technologies (Nasdaq: SNCR) in Bridgewater, N.J. develops software platforms that work behind the scenes to automatically handle some of the complicated tasks necessary for such devices to connect hassle-free over networks. And now this twelve-year-old company is broadening its reach.

Synchronoss’s platforms are used for a variety of tasks such as activating service subscriptions for wireless devices and transferring content and data from one gadget to another. The company provides activation and connection software for devices such as tablets, laptops, data cards, smartphones, and network-enabled cameras. Users may not realize Synchronoss’s software is at work keeping devices in synch—and that is precisely the point.

In January, Synchronoss branched out big time with its $45.5 million buyout of Marseille, France-based software developer Miyowa. Synchronoss may pay up to $13.5 million in addition if Miyowa’s business meets certain quarterly targets. Biju Nair, Synchronoss’s executive vice president of product management and chief strategy officer, says Miyowa’s software aggregates social networks and messaging for users of connected devices into one platform. That helps address the problem of status updates and other communications creating knots of data traffic on networks. “Feeds like Twitter, Facebook, and instant messages can be very chatty,” Nair says. “It creates a lot of congestion.”

Miyowa’s software platform can also reduce the power drain on mobile devices by consolidating social communications, so there’s no need for separate software to be running each service. Network operators and individual users of Miyowa’s platform can set parameters that control which updates from social networks get sent to the devices. “That way I’m not getting updates on every single comment on a picture on a Facebook page,” Nair says.

Miyowa’s technology also offers data compression to help trim back the burden on networks. For example, its software optimizes high resolution photos for display on mobile devices. “The network traffic is dramatically reduced because the size of the file is much smaller,” Nair says.

In addition to access to technology for the social sphere, the acquisition of Miyowa helps deepen Synchronoss’s relationships with Facebook, Microsoft, and Twitter. Nair says those companies provide access to application programming interfaces that help Miyowa’s platform replicate the look and performance of their respective social and messaging software.

Miyowa’s customers include device makers Samsung and HTC, French telecom giant Orange, and it has partnerships with other social networks and messaging services such Google Talk and AOL Instant Messenger.

The acquisition of Miyowa is not the only way Synchronoss is expanding. On March 27 Synchronoss moved to its current 80,000-square-foot headquarters in Bridgewater, from a nearby 30,000-square-foot office. The company’s coffers are also filling up. For its fiscal year ended Dec. 31, 2011, Synchronoss reported net income of $15.1 million on $229 million in revenue. That compares with net income of $3.9 million on revenue of $166 million for the prior year period. The company’s stock has jumped 24 percent to $30.24 in the last six months.

Synchronoss first made a name for itself by providing software used to activate wireless subscriptions for iPhones when they debuted in 2007. The company continues to diversify its technology and strategy through internal growth and buyout targets. Myowa is just the latest acquisition by Synchronoss, and Nair says the company is open to other potential deals that offer up innovation.

In 2010 Synchronoss acquired FusionOne in San Jose, Calif. for $32 million cash and $7.1 million in stock. FusionOne developed software that synchronizes files and content on various devices. Nair joined Synchronoss in March 2011 through the $5.8 million acquisition of his own startup, Chicago’s Sapience Knowledge Systems. Nair was CEO of Sapience, which developed software for customer relations and churn management for wireless companies.

Nair says connected devices are evolving as social networks become more entwined in traditional communications. Address books on mobile devices more frequently include LinkedIn contact information alongside telephone numbers and e-mail addresses. Users have more choices when it comes the way they communicate through these devices and Synchronoss is positioning itself to provide platforms to seamlessly manage these multifaceted conversations, Nair says. “The acquisition of Miyowa accelerates our strategy to integrate such social communication,” he says.

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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