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DMI acquires KnowledgePath for $22 million

Andrew Nusca
By
Andrew Nusca
Andrew Nusca
Editorial Director, Brainstorm; author, Fortune Tech
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Andrew Nusca
By
Andrew Nusca
Andrew Nusca
Editorial Director, Brainstorm; author, Fortune Tech
Down Arrow Button Icon
March 25, 2014, 5:22 PM ET
DMI’s chief executive, Jay Sunny Bajaj, wants his company to be “the world’s largest pure-play integrated mobile enterprise solutions company.”

FORTUNE — You probably haven’t heard of DMI, but it’s likely that you’ve used one of its creations.

The Bethesda, Md.-based enterprise mobility company has developed mobile sites and apps for some of the biggest and highest-profile companies in the world, from Abercrombie & Fitch (ANF) and Anheuser-Busch InBev (BUD) to ESPN and Unilever (UN). It manages mobile devices for several Fortune 500 stalwarts, including BP (BP), Johnson & Johnson (JNJ), and Sears. And it makes big data analytics tools and cybersecurity defenses for 40 different U.S. government agencies.

What DMI does — live in a world where stylesheets, algorithms, and logistics rule — isn’t very sexy. But the company literally has its hands in the pockets of some of business’ biggest players.

Over the last 18 months, DMI’s chief executive, Jay Sunny Bajaj, has carefully been assembling the parts needed for the company to offer a full suite of enterprise mobility services. In January, the company acquired its fifth company in that period: KnowledgePath, a Boston-based firm that focuses on integrating companies’ e-commerce storefronts with the back-end systems — financials, warehouse management, CRM, inventory, ERP — used to run the business. The purchase price was $22 million, in a mix of cash and equity.

MORE: Consumers hate in-store tracking (but retailers, startups and investors love it)

Of interest to DMI is KnowledgePath’s existing customer base — it serves American Eagle Outfitters (AEO), Bed Bath & Beyond (BBBY), Brookstone, J.C. Penney (JCP), and TJX (TJX), among others — and its role in what Bajaj estimates is a $31 billion mobile commerce market.

“We realized a year and a half ago that this was going to be an emerging space,” Bajaj says “We saw Sephora and Apple have global point-of-sale systems in the hands of sales people. We realized that mobile commerce and omnichannel commerce would be the way of the future. For us, [the acquisition] was not to take out a competitor but augment a capability — buy the technology and talent and add it to the suite of services and customers. It was all part of the master plan.”

KnowledgePath began in 2010 as a self-funded merger of three small consulting companies. Four years later, the company has 90 employees in offices located near Boston, Pittsburgh, San Francisco, and Washington, D.C. and about $15 million in annual revenue.

“We see more and more the need for strong mobile capabilities,” KnowledgePath CEO Marc Irish says. “Mobile is really becoming the linchpin for omnichannel commerce — you can’t really do it without it. When we talked to DMI, we thought, ‘Wow, these guys are ahead of the game. Let’s see where we plug in.’ So we went down for a visit and were immediately attracted. The ability for them to deliver strategy, user experience, big data analytics, mobile device management … all of these things are needed by our clients down the road. We had been approached over the previous year a few times. We resisted — it wasn’t a good fit, we could do a better job on our own, let’s keep going on our trajectory. But sometimes you get the call that pricks your ears up a little bit more.”

MORE: Report: Google will thrive in mobile shift

The smaller company will remain a wholly owned subsidiary of DMI in the near future, but “over time we’ll be fully integrated,” Bajaj says. “We have 1,800 people now. We don’t have the luxury to make mistakes and play high-stakes poker; we do things for the love of the game. We’re pretty high-touch, hands on. We’re not a small business, but we still have that fabric that keeps us together. We’re making sure the companies we acquire have some commonality. You do whatever it takes to make sure you honor your commitments.”

Eric Singleton, the chief information officer for the clothing retailer Chico’s, says the move to mobile and omnichannel commerce is a major trend affecting retail companies. Chico’s, which also owns the White House Black Market brand, contracted KnowledgePath to link its Oracle ATG system with an external application it developed so that it could process transactions.

“We have meaningful continual relationships with our customer base and we’ve established a high degree of trust with them,” he says. “These apps and technologies that we’ve laid out are based on a belief that if we can be easily available and accessible throughout the day — but not invasive — than we’re accommodating the person’s daily life far more than just in the store at one moment, or a promotional e-mail. It’s an endless experience.”

One that Bajaj sees as a major opportunity.

“It’s not just about mobile devices and tablets as it is getting the end business result,” he says, before adding: “We want to be the world’s largest pure-play integrated mobile enterprise solutions company.”

About the Author
Andrew Nusca
By Andrew NuscaEditorial Director, Brainstorm; author, Fortune Tech
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Andrew Nusca is the editorial director of Brainstorm, Fortune's innovation-obsessed community and event series. He also authors Fortune Tech, Fortune’s flagship tech newsletter.

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