A lesser-known but important player in Silicon Valley’s tech world is being acquired today – a move that underlines the changing economics in the world of hardware, as it looks to get more involved in that space. Surfaceink, a company that got its start as Apple’s primary hardware engineering partner after Steve Jobs’ return as CEO, is being acquired by PwC, the professional services firm that provides accounting, management consulting, IT and more to its enterprise clients.
The financial terms of the deal are not disclosed. Surfaceink – which today not only prototypes and designs hardware ranging from consumer devices to physical objects used in enterprise environments, but also operates laboratories to test for acoustics, electronics and more – has never attracted external funding.
The company has about 50 employees in the Bay Area and they will all participate as part of the deal. That includes Eric Bauswell, the CEO who founded the company.
Surfaceink will also carry out work in progress with existing customers and work with PwC to acquire new customers.
Bauswell declined in an interview to say how many customers the company has, who they are and what they are working on. However, the names of past and present customers listed on the site are a veritable who’s who of the tech industry: Amazon, Apple, Atari, Dell, Facebook, Google, HP, Intel, Microsoft, PayPal, Qualcomm and more.
PwC is not exactly known as a player in the hardware field. But it already has a number of big tech companies as customers, and importantly, a number of other companies that are either interested in building hardware products to expand their engagement with customers, or, on a more basic, strategic level, are interested in researching what they want to do. could use hardware now and in the future – their own or that of third-party partners – to grow their business.
With Sufaceink, PwC both brings in the expertise to better understand that part of their clients’ activities, and it also opens the door to potentially become involved in working on that for them. The trend to increase engagement was also something that prompted Surfaceink to explore what the next steps would be. Bauswell said these explorations may also include external investments to build out internal advice but remain independent.
“It was a follow-up to a strategic renewal within PwC,” says Jenny Koehler, head of Business Development at PwC, who works on strategic growth and helped find Surfaceink. “We always scan the market looking for interesting companies, whether for a partnership or an acquisition, and Surfaceink was one of them. It happened at the same time they were exploring [alternatives] for their purposes, so that they can deliver more broadly to their customers.” She said the couple started talking over a year ago.
“There is a long laundry list of reasons why different companies would want to work with us. And at the end of the day, they’re all very individualized,” Bauswell said. “Overall, we have a team that has a lot of experience shipping products. When people want to bring a new product to market, pursue a new business sector or create a new business unit, we are often the first on the scene. They will start to grow their team, and we support that, so that they can be sustainable even outside of our involvement. Getting into a cohesive team to execute, with an experienced team that has shipped a lot of product, reduces a lot of that risk.
Now, as part of a big five consultancy, Surfaceink arguably looks like an even less risky partner for even bigger clients, who may come from far outside the technology but need to explore ways to better leverage it in the future.
In turn, Surfaceink has played a very interesting and crucial role in the development of the technology industry. It was founded in 1999 specifically as a partner of Apple, which had ambitious long-term plans with the reappointment 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 effort to acquire new customers.
Apple dropped the company shortly afterwards. Speaking to the New York Times at the time, Bauswell said this was due to “Apple’s growing awareness of our off-the-shelf capabilities… I think they see our capabilities as an opportunity for competitors,” he said.
Of course, Apple had gone into the stratosphere as a company at that point, and so there would have been an argument for the expanded company to bring more hardware engineering in-house anyway.
That’s a route Apple has taken with other aspects of its product design, from chipmaking to developing maps and streaming services. It also appeared that Apple had also poached people after the divorce. Even today, Apple employs at least 15 people in hardware engineering who previously worked at Surfaceink, a LinkedIn scan shows.