bamnsour
5th July 2006, 08:16
The announcement in May that Atlanta-based enterprise software purveyor Infor will buy SSA Global may have been unexpected, but it certainly was not without precedent, as the enterprise applications market continues to consolidate across its many sectors.
Over the past year, the various technology segments of the market -- enterprise resource planning, supply chain management, product lifecycle management, and customer relationship management -- have all witnessed major vendor acquisitions. For example, Lawson recently completed the purchase of Intentia in the ERP space. Meanwhile, JDA Software Group announced that it was acquiring SCM provider Manugistics, PLM provider Dassault bought MatrixOne, and Oracle acquired Siebel Systems to fill out its CRM lineup.
News of an acquisition almost always provokes immediate concern for the fate of product lines, especially if the purchaser and the company being acquired have similar or competing products. And the reassurance from those doing the buying is usually just as swift and predictable: Customer investments will be protected and products will be supported and serviced.
That was pretty much the message from Infor at the time it announced the SSA Global purchase. But rarely has the industry seen a combination of two companies -- both of which have been aggressive buyers of software providers -- with so many product lines. Should the merger be completed as expected in the third quarter, the $1.6 billion deal would represent an amalgamation of about 30 software companies, with more than a dozen ERP products.
Infor has said that once the acquisition is completed, it will publish a three-year product roadmap. In the meantime, users and analysts are playing the product-fate speculation game.
AMR Research analyst Simon Jacobson, for example, recently wrote that Infor needs to make product recommendations to new customers. "Infor must articulate the product roadmap for process and discrete sub-verticals, and answer the question, 'What will new customers buy?' Jacobson noted. "Infor also has to accommodate its installed base of Progress Software-based systems [in a way] that reconciles the needs of customers investing in Progress Software and IBM platforms," he wrote.
Cindy Jutras, vice president and service director at Aberdeen Group, sees product overlap in the consolidation. SSA positions itself horizontally with two product groupings -- ERP products under the LN banner, running on IBM's iSeries; and ERP products under the LX line, for applications on Unix and Microsoft NT systems. It is very much a "one size fits most" play that bumps into Infor's more vertical offerings, Jutras says. She also points out that SSA's Baan applications support an engineer-to-order environment, an area that Infor does not address.
With so much at stake, some manufacturers will take a wait-and-see approach before making decisions. But some don't have that luxury. Take Genlyte Group Inc., a lighting manufacturer in Louisville, KY. The company operates 17 divisions that run 10 different financial packages. The goal is to whittle that down to three: MAPICS for iSeries (now Infor XA ERP), Infor SyteLine running on Microsoft, and Glovia, a unit of Fujitsu that makes a Linux-based ERP product.
"I'm not quite sure if this puts our plans on hold. I don't think it does, but it gives me pause," says Rick Blanchard, Genlyte Group's CIO. "All of a sudden it's a different dynamic that has to be evaluated, and I'm not sure how it will play out yet. It's difficult for roll-ups to support numerous platforms... and I would be extremely dismayed if they change the roadmap on SyteLine."
As an individual it's difficult to influence the roadmap of what will now be the third-largest enterprise application company behind Oracle and SAP. That's why groups like SSA Global Users-North America (SSAU) are responding to the acquisition with a collective voice. SSAU is made up of about 500 member companies and 1,800 individual users.
"We believe there is a continuing need for a cohesive community of users who can come together to discuss individual product topics and serve as a collective voice to our technology provider," said SSAU board chair Nancy Schoeben in an e-mail. "Just as our current organization emerged from past acquisitions, a new community will emerge from the Infor acquisition."
Meanwhile, end-users may continue to feel the pressure of a marketplace in flux.
Genlyte's Blanchard says he's been through acquisitions with technology suppliers before and has experienced service degradations. More than anything, he does not want to be forced to move from one application to another.
"It concerns me because a lot of what Infor is doing may be perceived to be a financial play," Blanchard says. "If I were an investor in the company I may applaud that, but as a customer that gives me heartburn."
http://www.managingautomation.com/maonline/news/read/Users_Analysts_Await_Product_Roadmap_Details_from_Infor_SSA_Global_Merger_20522
Over the past year, the various technology segments of the market -- enterprise resource planning, supply chain management, product lifecycle management, and customer relationship management -- have all witnessed major vendor acquisitions. For example, Lawson recently completed the purchase of Intentia in the ERP space. Meanwhile, JDA Software Group announced that it was acquiring SCM provider Manugistics, PLM provider Dassault bought MatrixOne, and Oracle acquired Siebel Systems to fill out its CRM lineup.
News of an acquisition almost always provokes immediate concern for the fate of product lines, especially if the purchaser and the company being acquired have similar or competing products. And the reassurance from those doing the buying is usually just as swift and predictable: Customer investments will be protected and products will be supported and serviced.
That was pretty much the message from Infor at the time it announced the SSA Global purchase. But rarely has the industry seen a combination of two companies -- both of which have been aggressive buyers of software providers -- with so many product lines. Should the merger be completed as expected in the third quarter, the $1.6 billion deal would represent an amalgamation of about 30 software companies, with more than a dozen ERP products.
Infor has said that once the acquisition is completed, it will publish a three-year product roadmap. In the meantime, users and analysts are playing the product-fate speculation game.
AMR Research analyst Simon Jacobson, for example, recently wrote that Infor needs to make product recommendations to new customers. "Infor must articulate the product roadmap for process and discrete sub-verticals, and answer the question, 'What will new customers buy?' Jacobson noted. "Infor also has to accommodate its installed base of Progress Software-based systems [in a way] that reconciles the needs of customers investing in Progress Software and IBM platforms," he wrote.
Cindy Jutras, vice president and service director at Aberdeen Group, sees product overlap in the consolidation. SSA positions itself horizontally with two product groupings -- ERP products under the LN banner, running on IBM's iSeries; and ERP products under the LX line, for applications on Unix and Microsoft NT systems. It is very much a "one size fits most" play that bumps into Infor's more vertical offerings, Jutras says. She also points out that SSA's Baan applications support an engineer-to-order environment, an area that Infor does not address.
With so much at stake, some manufacturers will take a wait-and-see approach before making decisions. But some don't have that luxury. Take Genlyte Group Inc., a lighting manufacturer in Louisville, KY. The company operates 17 divisions that run 10 different financial packages. The goal is to whittle that down to three: MAPICS for iSeries (now Infor XA ERP), Infor SyteLine running on Microsoft, and Glovia, a unit of Fujitsu that makes a Linux-based ERP product.
"I'm not quite sure if this puts our plans on hold. I don't think it does, but it gives me pause," says Rick Blanchard, Genlyte Group's CIO. "All of a sudden it's a different dynamic that has to be evaluated, and I'm not sure how it will play out yet. It's difficult for roll-ups to support numerous platforms... and I would be extremely dismayed if they change the roadmap on SyteLine."
As an individual it's difficult to influence the roadmap of what will now be the third-largest enterprise application company behind Oracle and SAP. That's why groups like SSA Global Users-North America (SSAU) are responding to the acquisition with a collective voice. SSAU is made up of about 500 member companies and 1,800 individual users.
"We believe there is a continuing need for a cohesive community of users who can come together to discuss individual product topics and serve as a collective voice to our technology provider," said SSAU board chair Nancy Schoeben in an e-mail. "Just as our current organization emerged from past acquisitions, a new community will emerge from the Infor acquisition."
Meanwhile, end-users may continue to feel the pressure of a marketplace in flux.
Genlyte's Blanchard says he's been through acquisitions with technology suppliers before and has experienced service degradations. More than anything, he does not want to be forced to move from one application to another.
"It concerns me because a lot of what Infor is doing may be perceived to be a financial play," Blanchard says. "If I were an investor in the company I may applaud that, but as a customer that gives me heartburn."
http://www.managingautomation.com/maonline/news/read/Users_Analysts_Await_Product_Roadmap_Details_from_Infor_SSA_Global_Merger_20522