A lesser-known but important player in the Silicon Valley tech world is being acquired today — a move that underscores the changing economics of the hardware world. Surfaceinka company that started as Apple’s key hardware engineering partner after Steve Jobs returns as CEO, it is acquired by PwCthe professional services firm that provides accounting, management consulting, IT and more to its corporate clients.
Financial terms of the deal were not disclosed. Surfaceink — which today not only prototypes and designs hardware ranging from consumer devices to physical objects used in corporate environments, but also operates labs to test acoustics, electronics and more — has never raised outside funding.
The firm has about 50 employees in the Bay Area, and all of them will join PwC as part of the deal. This includes Eric Bauswell, the CEO who founded the company.
Surfaceink will also bring its ongoing work with existing clients, while working with PwC to win new business.
Bauswell, in an interview, declined to say how many clients the company has, who they are and what they are working on. However, the names of past and present customers, it is listed on its websiteis a veritable who’s who of the tech industry: They include Amazon, Apple, Atari, Dell, Facebook, Google, HP, Intel, Microsoft, PayPal, Qualcomm and more.
PwC isn’t exactly known as a hardware player. But it already has a number of large tech companies as customers, and more importantly, a number of other companies that are either interested in building hardware products to extend their engagement with customers, or at a more basic, strategic level, are interested in exploring what they might do with hardware — their own or third-party partners — now and in the future to grow their business.
With Sufaceink, PwC both gains in-house expertise to better understand this element of their clients’ businesses and also opens the door to potentially engage in it on their behalf. The trend to broaden engagement was also something that prompted Surfaceink to explore what its next steps would be. Bauswell said those explorations included potentially taking on outside investment to create an in-house consultancy, but they remain independent.
“It was on the heels of a strategic renewal within PwC,” said Jenny Koehler, PwC’s head of business development who works on strategic development and helped search for Surfaceink. “We’re always scanning the market for interesting companies, whether it’s a partnership or an acquisition, and Surfaceink was one of them. It happened to be at the same time they were exploring [alternatives] for their purposes to be able to deliver wider results with their clients”. She said the couple started talking a lot about a year ago.
“There is a long list of reasons why different companies would like to work with us. And they all end up being very personalized,” added Bauswell. “Generally, it’s that we have a team that has a lot of experience in moving products. When people want to ship a new product or look for a new business area or create a new business unit, you know, a lot of times we’ll be the first boots on the ground. They will start to enrich their team and we support this, to be sustainable beyond our commitment. Having a cohesive execution team, with an experienced team that has shipped a lot of products, mitigates a lot of that risk.”
Now, as part of a big-five consulting firm, Surfaceink arguably looks like an even more risk-averse partner for even bigger clients, who may come from far outside of technology but need to explore ways to make better use of it. in the future.
For its part, Surfaceink has had a very interesting and central role in the development of the technology industry. It was founded in 1999, specifically to be a partner of Apple, which had ambitious and long-term plans with the reinstatement of Steve Jobs as CEO in 1997.
The pair worked together on virtually every piece of hardware Apple made at the time, including the iMac, PowerBook, iPod, iPhone, iPad and MacBook. Interestingly, that relationship took a turn for the worse in 2010, when Surfaceink showed off its own tablet designs as part of its bid to attract new customers.
Apple soon after left the company. Bauswell, speaking at The New York Times at the time, he said it was due to Apple’s “increasing awareness of our turnkey capabilities … I think they see our capabilities as an opportunity for competitors,” he said.
Of course, Apple had taken off into the stratosphere as a business by this point, so there would be an argument for the enlarged company to bring more hardware engineering in-house regardless.
This is the path Apple has taken with other aspects of its product design, from creating chips to developing maps and streaming services. It also seemed that Apple too poachers after the breakup. Even today, there are at least 15 people at Apple working in hardware engineering who previously worked at Surfaceink, according to a scan LinkedIn.
