Acquisitions steamroll enterprise software market

The ERP market continues to shrink with the buyout of SSA Global by Infor Global Systems, which comes hot on the heels of Intentia International's merger with Lawson Software.

The acquisitions, valued at about $US1.4 billion and $480 million respectively, will result in both companies consolidating a large slice of market share. SSA Global's chairman, president and CEO Mike Greenough, said size and scale are important in a consolidating marketplace especially when competing against software giants Oracle and SAP.

"With this acquisition, Infor will become the third-largest enterprise software provider in the industry [after SAP and Oracle] with about $ $US1.6 billion in revenue" Infor CEO Jim Schaper said adding that the company has 27,000 customers and 3100 employees located in 100 countries.

SSA Global has swallowed up a number of companies in recent years including risk management software provider Baan and CRM vendor Ephiphany. Forrester Research senior analyst Ray Wang said the merger will allow Infor to create applications based on SOA and use its domain expertise to make inroads in the manufacturing industry.

While Infor produces business software for distribution manufacturing clients, SSA also has a presence in consumer goods and services industries. Consolidation continues to steamroll the enterprise software market with the Intentia/Lawson merger pushing the company into 40 countries, with 4000 customers, 3500 employees and revenue topping $780 million.

Both companies will maintain their product suites. Lawson, which has picked up Intentia's manufacturing, distribution and maintenance software, has financial, human resources, procurement and retailing suites.

Harry Debes, Lawson Software president and CEO, said the new portfolio will give them an advantage in the mid-tier market.

"We are convinced that the market wants legitimate and credible choices and this combination makes us a strong contender in numerous markets around the globe," he said.

Lawson recently released its Landmark ERP system which aims to improve and automate the procurement process and will succeed the recently launched Lawson 9 suite.

A local competitor in this space is TechnologyOne which this week announced a half yearly profit increase of 52 percent to $7.2 million as well as $6.9 million growth in licence fees, up 182 per cent on last year.

TechnologyOne's chairman, Adrian Di Marco attributed this to customer wins in the tier-one market.

"TechnologyOne is well established in the mid-tier market. However, we are now [gaining momentum] over our more established competitors in the tier-one market", he said adding that the recent spate of large acquisitions by the likes of Oracle has left some vendors with the huge task of rationalizing their product range.

w - With Marc Songini