Harman continues shopping spree with two software takeovers

January 26, 2015 // By Christoph Hammerschmidt
Infotainment giant Harman International has signed takeover agreements with Red Bend Software and Symphony Teleca. The investment has a total value of about $950 million (about €750 million). With the move, Harman continues to strengthen its position in technology fields like software development, OTA, IoT and cloud computing.

After the recent acquisition of infotainment development S1nn GmbH of Stuttgart (Germany), Harman now reaches deeply into its pockets and buys Silicon-Valley based Symphony Teleca, a company with some 8000 employees. Symphony Teleca focuses primarily on software development and engineering; According to market watcher IHS Automotive, it achieves 50% of its revenue with automotive and mobile verticals; from the rest, 25% is achieved in healthcare.

The other acquisition, Red Bend Software, is probably even more important for Harman: Red Bend is the leading provider of solutions for software-over-the-air (OTA). While Red Bend's clientele currently can mainly be found in handset manufacturers and mobile carriers, the company is currently seeking to expand its business with companies in the automotive value chain. In this context, Red Band has established a strategic collaboration agreement with software and services provider Vector Informatik (Stuttgart, Germany) who in turn achieves most of its sales with carmakers and tier ones. Red Bend is said to be a technology leader in IoT and cyber security technologies. With 230 employees in Israel, France, UK, US, Japan, Korea and Germany, the company is much smaller that Symphony Teleca, but applications like OTA updates for automotive firmware and software (FOTA / SOTA) are a very promising market for the future.

According to IHS automotive expert, the Red Bend takeover could help Harman to grab the leadership position in the global automotive FOTA and SOTA markets. In addition, both acquisitions would likely create synergies between Harman's Aha Cloud platform, Red Bend's OTA infrastructure and Symphony Teleca's OTA and analytics infrastructure. The move is also likely to strengthen Harman's position against other tier ones like Bosch, Continental, Delphi, Panasonic and Visteon; IHS believes this could trigger another round of software acquisitions in the related markets.

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