Puppet, Portland’s largest tech company, sold to Minneapolis-based Perforce Software - OregonLive

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Portland software developer Puppet, the city’s largest homegrown tech company, sold Monday to a Minneapolis firm called Perforce Software. The privately held companies didn’t disclose terms of their deal but indicated Puppet will operate as a standalone business within Perforce, at least for the time being.

“I’m proud and pleased with what we’ve done, and I think Perforce is a great place to land,” said Luke Kanies, the Reed College graduate who founded Puppet in 2005 and served as its CEO until 2016. Kanies is still on Puppet’s board.

“All acquisitions are bittersweet. No one should start a company in hopes it becomes part of a larger company,” Kanies said. “But I do think this is a good outcome for the company. It is as good an outcome as we could make it for as many people as possible.”

Puppet adds 500 employees to Perforce’s workforce of 1,200. Perforce said Monday that Puppet’s Portland office will remain open. The larger company said it operates on a hybrid work model, similar to Puppet’s.

Puppet was perhaps the most prominent of a half-dozen tech companies that helped revitalize Oregon’s tech industry in the aftermath of the Great Recession. Its software helps manage data centers and other large computer systems.

Puppet moved its headquarters from Kanies’ home state of Tennessee to Portland in 2009, and grew into one of the city’s best-funded and best-known technology businesses. It raised at least $128 million and once had 600 employees, most of them at its headquarters on the Portland waterfront.

Puppet pursued an initial public offering in 2016, but technology moved quickly, and its clients soon had alternatives to the Portland company’s development operations, or DevOps, software. Growth slowed, Kanies stepped down as CEO, and Puppet shelved its IPO plans and endured two rounds of layoffs.

“Whether I like it or not, DevOps teams are different now,” Kanies wrote on Twitter. “Companies are looking for a complete solution, rather than wanting to integrate individual best of breed vendors. And the world is shifting in lots of other ways, not all of which we’ve done well at following.”

Still, Puppet remained one of the city’s most visible technology companies and the company said Monday its annual revenues top $100 million. Puppet said it serves 40 of the Fortune 50 largest companies and counts 85% of the world’s largest banks as clients.

And Puppet executives helped run a succession of smaller Portland firms, contributing to ongoing renewal in the city’s tech scene.

In 2020 Puppet declared it planned an IPO the following year. But while the company was surely under pressure from its initial backers to find some return on their investments — Puppet’s initial funding was 13 years ago — a public offering at this late date seemed a longshot and never materialized.

“There was a point in time where many of us, myself included, thought Puppet would be one of the great IPOs to come out of the Pacific Northwest. And for a company of our size, we’ve always punched above our weight,” Puppet CEO Yvonne Wassenaar wrote in an open letter Monday, acknowledging the company didn’t meet some of its goals.

“But what matters long-term is not what financial milestones fuel a company’s growth,” Wassenaar said. Instead, she said, Puppet will be able to reach customers with Perforce “in a way that we could not have done on our own.”

Perforce, founded in 1995, is backed by private equity firms Francisco Partners and Clearlake Capital Group. It said that buying Puppet will expand Perforce’s own portfolio of DevOps software.

“With Puppet, we will be providing our customers with access to a product portfolio that enables them to drive innovation on a global scale. We look forward to welcoming the Puppet team and continuing to offer the level of customer support, services, and community Puppet has established in the market,” Perforce CEO Mark Ties said in a statement.

Along with Jive Software, Urban Airship (now Airship), Elemental Technologies, Jama Software, Janrain, Act-On Software and online banker Simple, Puppet formed a cluster of tech startups in downtown Portland a decade ago. Collectively, they helped transition Oregon’s tech sector away from its historical reliance on computer hardware.

All those companies had big aspirations, mostly unrealized. Jive, for example, essentially shut down in 2017 after its sale to a Texas company. The same thing happened to Simple, which pulled the plug last year after the sale of its parent bank.

Their legacies endure, though, in smaller companies launched by their alumni, outposts of larger companies based elsewhere, and a cadre of seasoned technology executives who cut their teeth in a bustling Portland startup scene.

“It’s so hard to focus on what we got and what we accomplished and not to focus on the dreams we had five years ago,” Kanies said Monday. He said that running Puppet had taken a big toll on him, personally, and that he’s taking some time to recroup.

There’s certainly a measure of disappointment that Puppet didn’t grow into the big, standalone business software company he envisioned then, Kanies acknowledged. But he said he takes great satisfaction that Puppet remade its sector of the software industry with tools that made it easier for DevOps professionals to do their jobs.

And Kanies said he takes pride in building a welcoming, open community within Puppet. If he’d been told what Puppet would become back in 2005, or 2009, Kanies said he would have been delighted.

“I would have taken it in a heartbeat,” Kanies said. “Because it really meant that much, and because we really did end up doing so much.”

-- Mike Rogoway | mrogoway@oregonian.com | Twitter: @rogoway | 503-294-7699

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