Plus, end-of-year earnings for Amazon Web Services and a new government support unit at Verizon.
GovTech Business Watch is a weekly roundup of news in the government technology market.
Vista Equity Partners has closed the book on an $850 million deal that will create a new public-sector-focused software company in SunGard Public Sector.
SunGard has previously sold solutions for both education and government entities, but under the deal the two sides of the business will be split. The company’s public-sector offerings include justice and public safety tools such as ONESolution and NaviLine, as well as software for local governments such as the database-focused PLUS series and the land management solution TRAKiT.
Vista purchased SunGard from the financial technology company FIS with plans to merge its education products into previously purchased companies. For Vista, the deal represents another step into government following its purchasing and subsequent merger of GovDelivery and Granicus last year.
The bulk of Vista’s portfolio remains devoted to business-to-business software firms.
NIC got bigger in 2016, and expects to keep getting bigger in 2017.
On Feb. 1, the company announced net income of $55.8 million in fiscal year 2016, up 33 percent from $42 million in fiscal 2015. That was due mostly to growth in portal revenues, which the company reaps from fees tacked on for services like permit and license processing. Revenues for the year were $317.9 million, up 8.7 percent from $292.4 million the year prior.
In an investor conference call, NIC Chief Financial Officer Stephen Kovzan said the company expects revenue in the $323 million - $333 million range for fiscal 2017.
NIC faces expiring portal contracts with two states, Tennessee and Iowa, but signed Louisiana as a new client in 2016 as well. That added $3.3 million to NIC’s revenue total for the fiscal year. On top of that, NIC launched a recreational licensing system for Wisconsin called Go Wild in 2016 and streamlined services for Nebraska’s cattle industry through Nebraska Interactive.
During the investor call, NIC Chief Executive Officer Harry Herington said the company has won a bid to provide permitting and licensing services for the state of Illinois, but is awaiting a formal contract.
In 2017, NIC will continue pushing its digital government assistant product, Gov2Go. The assistant, which is meant to streamline government services into a single access point for constituents, is already in place in Arkansas.
Amazon Web Services grew quickly in 2016, posting double-digit growth percentages for net sales in every quarter of the year. In the fourth quarter, AWS pulled in $3.5 billion in net sales, a 47 percent increase from the fourth quarter of 2015.
More than 2,300 governments use the AWS cloud, along with 7,000 education institutions and 20,000 nonprofits.
According to a Feb. 2 press release, customers migrated 18,000 databases using AWS in 2016. The company continues to build its cloud-based artificial intelligence capabilities, launching image analysis, facial and object recognition and speech understanding capabilities last year. Those programs have already begun playing a role in government, with the states of Utah and Mississippi launching Amazon Alexa-based programs to help citizens engage with government.
Verizon has announced the creation of a new business unit, Verizon Business Markets (VBM), to support its services to local and state government.
The unit is starting off focusing on managed IT services, IP networking, security, advanced voice and broadband, according to a Feb. 2 press release. The group’s strategy will be to take a digital-first, end-to-end approach to its business.
VBM will consist of people from business and enterprise groups, as well as resources from recently acquired XO Communications. Aside from serving state and local government, the unit will also serve educational institutions and local businesses.