STRATACACHE Acquires Another Rival CMS Firm, Real Digital Media

Chris Riegel is continuing to buy up competitors in the digital signage software space, with news bright and early this morning that his Dayton, OH-based company STRATACACHE has acquired Sarasota, FL-based Real Digital Media.

Both are content management software firms with similar products – though Stratacache has a much bigger headcount and sells much more in terms of services and hardware. This deal comes on the heels of STRATACACHE buying a larger competitor, Scala, last summer, as well as the QSR display side of Vertigo Group.

No terms of the deal were disclosed, but the press release says RDM will be a wholly-owned subsidiary and that its flagship product NEOCAST will continue to be developed, supported and marketed.

RDM’s platform has a solid industry reputation and was one of the early entries in the market with a SaaS/cloud offer. I’m not sure where Riegel positions this additional software on his growing suite of options. It’s not a big reach to think he’s more buying into a client base, some good sales people and one of the smarter, more seasoned CEOs in the trade – Ken Goldberg. The company’s clients have included Subway and Cardinal Health.

Riegel is extremely sharp, but if his growing empire has an Achilles’ Heel, it’s been the absence of a plausible replacement CEO in the event he got sick, hurt or worse. I’ve flat asked him about that, and he’s said there was a succession strategy. But most people in this industry would be challenged to name an exec other than Riegel at STRATACACHE. Russell Young, kinda sorta maybe???

Now he’s got Goldberg in his immediate orbit, and the former Chairman of the Digital Signage Federation is known and much respected. He came out of retail consulting and operations, and retail is a big focus for STRATACACHE.

Riegel also travels damn near every week, globally. And while he’s got a lot of stamina, he’s only got so many hours, and can’t be in two places at once. A senior guy like Goldberg – who also has some strong sales folks like VP Kevin Spaeth – will help.

“STRATACACHE has made significant investments across our sales, support and service organizations globally to provide industry leading managed solutions,” says Riegel. “These investments have been extremely successful in service to our customers and have positioned STRATACACHE to strategically acquire companies that share our vision on the opportunity and growth of the digital signage industry. Real Digital Media has long maintained a strong position in the industry, and we believe the depth and breadth of STRATACACHE services will greatly extend Real Digital Media’s reach and solution offerings to the marketplace.”

“For over a decade, Real Digital Media has played an active role in the maturation of the digital signage industry,” adds Goldberg. “We are proud of our longevity and successes, and have long recognized industry consolidation as a critical next step for industry growth. STRATACACHE has unmatched capabilities that will allow Real Digital Media to better service the needs of our current and future customers, provide global scale, and streamline network launch and expansion efforts. We are excited about the next phase of Real Digital Media’s development as part of the STRATACACHE family of companies.”

RDM is a private company so I’ve no idea how it was doing financially. Companies like STRATACACHE and Four Winds Interactive came on the scene after RDM, and have grown much more rapidly, while RDM has stayed relatively small, tight and efficient – and probably not burdened by any debt or nuisance investors.

Here’s Goldberg, writing in his blog last summer, about the inevitable consolidation of software companies:

The digital signage industry has been faced with an imbalance between supply and demand for software and related services almost since its inception. The imbalance today is more pronounced, arguably causing greater harm than good.  The 300-vendor world is not sustainable, and its various effects on the industry are negative. Markets adjust to oversupply in very normal and natural ways, but at their own pace. The moment to rationalize financial and human capital in the software space is upon us. It may be time for players at every level to consider options. It might be combinations and rollups; or finding a strategic partner not currently in the space; or pivoting toward a different space. Complacency may well be costly.

There are not a lot of options out there for companies wanting to be acquired. If you are going down that path, better to be picked up and rolled into a group that knows this business and is going after it aggressively. Getting bought by a big displayco can maybe work out, but ask whoever might be left at X2O Media how life went after Barco bought the Montreal firm. The Founder/CEO and much of the team have since left – only some by choice.

Goldberg would know he’s not handing the company he’s guided for 12 years over to idiots, or that his team and product will be marginalized inside a mega-company. Good, rational move. But those are two big personalities and it would be entertaining to watch when Goldberg and Riegel differ on something.

 

Dave Haynes

Dave Haynes

Editor/Founder at Sixteen:Nine
Dave Haynes is the founder and editor of Sixteen:Nine, an online publication that has followed the digital signage industry for more than a decade. Dave does strategic advisory consulting work for many end-users and vendors, and also writes for many of them. He's based near Toronto.
Dave Haynes

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