Socrata, the company largely responsible for popularizing the concept of open data among state and local government in the U.S., is officially getting acquired.
Tyler Technologies, which offers a large array of software ranging from police computer-aided dispatch to permitting and licensing, is the company purchasing Socrata. Tyler is one of the older government-focused technology companies in the market today, and one of only a handful of publicly traded corporations.
Socrata, which launched in 2007, became synonymous with open data when it was a shiny new concept for a government to publish interactive data sets on the Internet. But as years went on, more and more open data companies sprang up and the market began to evolve. And so companies like Socrata began exploring new approaches — founded on open data, but offering more to customers.
For Socrata, that led to a whole new suite of products: open checkbooks and performance management and measurement, for example.
“The philosophy we’ve evolved to at Socrata is that open data needs to become a byproduct of government using its open data internally to … improve outcomes,” said Socrata founder and CEO Kevin Merritt.
How They Fit Together
When it comes down to fundamentals, Tyler and Socrata are both government data companies. It’s just that one of them takes in data and the other seeks to make it more useful by opening up access to it. So a big piece of the melding of the two companies will lie in Socrata’s ability to unlock the data coming out of Tyler’s products.
The plan is to offer Socrata’s data publishing capabilities — for both public consumption and internal sharing — to any government using Tyler’s products.
“What we envision is those integrations will be built in right out of the box,” said Bruce Graham, Tyler’s chief strategy officer.
From a customer perspective, that means that if a government agency buys a Tyler product like EnerGov, they will have the option to expand their license to include Socrata data sharing, too. Ideally, the integration will be so smooth that Tyler will actually be able to approach the customer and show them exactly what that data publishing would look like. Because Tyler will already have the data, it should be able to auto-populate a Socrata solution with it.
In that sense, Socrata will play an increasingly large role as a government data integrator.
“The data integration effectively becomes a solved problem for them,” Merritt said.
That’s been a role Socrata has been shifting toward for a while. Last year, the company achieved FedRAMP certification, which is the high federal bar for cybersecurity among cloud computing vendors. The certification, Merritt said, gave the company the ability to sell itself as a secure way to work with data government doesn’t actively share with the public.
That would include the kind of data in Tyler systems.
“Those lines of business systems are effectively — they create mini data silos,” Merritt said. “So Socrata can now be the integration layer in a secure FedRAMP environment.”
Tyler also expects to push more data sharing between governments now that a data-sharing company is joining its ranks. The idea, according to Merritt, is that government agencies will not only be able to look at how they’re performing, but also compare their data to regional neighbors and their peers.
The Business Case
For all the integration ahead, Socrata is not disappearing into Tyler. As part of the acquisition, Socrata will keep its name and branding; its employees and leadership will remain in place and it will continue to work with non-Tyler software.
In fact, Tyler will be creating a new division of its company based around Socrata. It already has five; the new one will deal with “all things data” and Merritt will lead it. He will report directly to Tyler President H. Lynn Moore.
Socrata will be working with essentially the rest of the company.
“We envision it as a very broad implementation, something that will be directed into every product family Tyler has,” Graham said.
It will also have new opportunities to sell to a much larger base of customers than it already had. Socrata has about 1,300 customers, compared with about 15,000 for Tyler. As of right now, the two companies have identified 100 shared customers — that might not be all of them, but there are still going to be thousands of Tyler customers Socrata hasn’t reached yet.
There are also some places where Socrata might replace or take over pre-existing Tyler efforts. For example, Tyler has been working on systems to help cities and counties exchange data. That project will likely be under Socrata supervision now.
“Socrata provides a much stronger [version of that],” Graham said. “We expect that that would be replaced or powered by Socrata going forward.”
Socrata had previously raised about $55 million in venture capital, according to Crunchbase. Investors including Morgenthaler Ventures, Sapphire Ventures and In-Q-Tel, the Central Intelligence Agency’s nonprofit venture capital arm.
Tyler did not disclose terms of the deal, though Graham noted that since Tyler reports financial results to the U.S. Securities and Exchange Commission, some of the details will become public record after the deal closes at the end of the month.