Another One (MFT Vendor) Bites the Dust

by | Feb 6, 2023

Last Wednesday’s announcement that Redwood Software has purchased Cerberus is just the latest in the contraction of the managed file transfer (MFT) software industry, reducing choice and likely increasing costs for customers of the products that have been swallowed up in recent years. Redwood Software is a portfolio company of the private equity firm Turn/River and that PE backed firm already bought MFT vendor Jscape in 2020.

If you’re keeping score, that means Jscape and Cerberus (purchased by Redwood Software), Globalscape and GoAnywhere (purchased by HelpSystems, rebranded as Fortra), and IpSwitch (purchased by Progress Software) are now gone. And some smaller companies have been consolidated through M&A as well, such as when Riverwood Capital-backed purchased ExaVault last year. All that activity affirms the value of managed file transfer software as a business tool.

Managed File Transfer is a Growing Industry

By some analyst calculations MFT is on a growth track to become a $3.12B market by 2030. And with good reason; secure managed file transfer software—like Coviant Software’s Diplomat MFT platform—is critical to moving data safely and automatically between organizations. When done right, MFT software encrypts files, transfers them using a secure transport protocol like SFTP, documents each step in the process to support compliance audits, affirms the legitimacy of the recipient, notifies of any trouble along the way, and does it all automatically to minimize the risk of human error.

That’s all vital to making sure regulators are satisfied that laws like the U.S. Health Insurance Portability and Accountability Act (HIPAA) and the EU General Data Protection Regulation (GDPR) are followed. It’s also a tremendous asset to building and maintaining trust between trading partners. Businesses need to know they can rely on their digital supply chain partners to safely deliver information to them on time and with minimal risk of a data breach that they may have to answer for. According to the 2022 Verizon Data Breach Investigations Report human error plays a role in 82% of all data breaches and of that number, “misdeliveries” (sending sensitive information to the wrong place) account for 13.5% of those. Automating data movement with a secure managed file transfer product like Diplomat MFT solves that problem.

Beware Private Equity Acquisitions

We can only speculate that the purchase of Cerberus was intended to buy MFT marketshare rather than to add any features or capabilities that were lacking after the Jscape acquisition. In the wake of such moves the acquiring company usually integrates the organization and works on migrating the customer base to the incumbent product. Then any resources deemed redundant or unnecessary to support the tech or manage customer service are cut loose. Private equity firms are not known for their altruism, so costs will be trimmed to maximize return on investment for Turn/River principals even if it means cutting corners.

If you are or were a customer of an acquired vendor, you probably know what that’s like. The account manager you got to know—and who knew and understood your organization—is suddenly replaced by a new kid who is nice enough, but is working from a script and not years of experience with your organization. Then you start to get emails about changes to the product. Somethings might change for the better, but some features you liked might also disappear. Then a sales rep starts reaching out with great offers on other products the new owner of your old vendor happens to sell, and they are certain you’ll love them. After a year or so your renewal contract arrives and it’s a little more expensive than it was before. And if something goes wrong, technical support takes a little bit longer to respond to you.

You Can Rely on Coviant Software

We know all this because we’re technology consumers and it’s happened to us. And some of our customers used to be customers of other MFT vendors and they grew dissatisfied at the changes they experienced when the company they loved got bought by a private equity-backed firm. The good news is, Coviant Software is independently owned and not beholden to private equity. We’ve been in business for nearly twenty years and are driven to provide the best possible secure managed file transfer product backed by insanely good customer support.

Our award-winning Diplomat MFT product line includes three right-sized versions engineered to support organizations of any size and scale, and our pricing is ethical and transparent. Coviant Software is proud that Diplomat MFT is trusted by many large enterprises in healthcare, financial services, manufacturing, government, law, retail, and every industry that values reliable and secure file transfer. Every day, Diplomat MFT is used to securely send, receive, host, and retrieve millions of sensitive files, and at a cost that is less than half of what the PE-owned vendors charge.

If you need to make a change, please contact us to schedule a demonstration.