Seemingly strange and the things once considered unlikely can happen in the enterprise applications market. A vendor that many have long considered 'gone south' seems to be coming to the rescue of its contemporary and long time fierce competitor, which has been abandoned by its powerful and uncaring parent that has been having troubles of its own lately. On April 8, SSA Global Technologies, Inc. (SSA GT), a worldwide enterprise solutions and services provider, announced it had acquired the supply chain management (SCM), financial management and human resource (HR) management product lines of interBiz, the eBusiness applications division of Computer Associates International, Inc. (NYSE: CA). The acquisition will add many proven solutions to SSA GT's also well-recognized offerings to the industrial sector. Financial terms of the agreement were not disclosed.
Through the acquisition, SSA GT believes it is on a path to regain a leading position in its target markets by solving industry-specific business challenges and creating a heterogeneous application environment that works seamlessly with other back-office applications. The combined company will serve more than 9,000 longstanding, market-leading companies in over 90 countries from more than 70 offices worldwide. On the other hand, CA, which is under investigation by the Justice Department and the Securities and Exchange Commission (SEC) for alleged accounting irregularities, said in a statement that it will focus on its core enterprise-management, security, storage, application development, integration, business-intelligence, and portal offerings.
SSA GT has pledged continued support for the interBiz product lines, along with assurance that it will enhance the applications. Furthermore, in some instances where it will make sense, there will be an effort to integrate the products as well as provide a migration plan for products using discontinued technologies, such as the HP 3000 platform. Through the transaction SSA GT hopes to achieve the following:
* Offer customers added support through an expanded global network; additional revenue to spend on research and development and expanded Global Guide Groups to understand customer, industry and market demands
* Provide the critical mass to re-position itself as a leading vendor in specific vertical markets, expanding its global capabilities, resources and customers
* Leverage the company's global service and support functions
* Underscore its business model, and financial viability
* Strengthen organic growth in its key vertical markets - automotive, fast moving consumer goods (including food, beverage and electronics), general manufacturing and pharmaceutical industries;
* Expand its commitment to deliver more opportunities for customers' e-commerce and collaboration initiatives
* Add experienced management and IT professionals in the U.S. and International markets.
Over the past year, SSA GT has been reengineering its company to deliver a solution strategy that involves e-commerce and collaboration with BPCS, its core ERP product. SSA Global Technologies will apply its business model and solution strategy to the newly acquired products. For customers utilizing the interBiz brands, this strategy will give them new opportunities to benefit from e-business and collaboration solutions. Products covered under this transaction include CAS, interBiz Logistics, interBiz Online, interBiz Reports, KBM, MANMAN, Masterpiece/Net, MasterPiece/Net HRMS, MAXCIM, MK Logistics, MK Manufacturing, PRMS and Warehouse BOSS. A fully integrated organizational structure is in place for SSA GT where employees are being integrated, service offerings are being coordinated and cross-selling opportunities pursued.
In a nutshell, the good news is - a foster home has been found for interBiz; but there is the bad news too - the room space might be insufficient to accommodate all of the orphaned products. Nevertheless, SSA GT is, for a number of reasons, possibly the best place where most of interBiz products will continue to be kept on a life support. There are seemingly many synergies that could exist between the two product lines/organizations, including the cited closeness of product codes (considered ancient by many, as they go as far back as COBOL or FORTRAN) at the base level and both camps' heavy reliance on mature IBM iSeries (formerly AS/400) platform. These sorts of blessings in disguise could still allow SSA GT to build on its core ERP transactional capabilities while being able to offer extensions to the core products, something not many other ERP vendors that are relying heavily on the latest 'hot button' technologies (e.g., Java or .NET) would be willing to undertake. Also the companies have similar corporate cultures and have long been competing in the same or similar markets. They both have extensive worldwide coverage, and both companies' staff members have extensive manufacturing and distribution industrial experience.
At a first glance, one can even notice a complementary nature of some products. Some of the interBiz products may indeed still provide a 'kick for a buck' proposition. For instance, PRMS is still a well respected manufacturing ERP offering and a formidable competitor to SSA GT's BPCS, although it is perceived as ancient in the market and has been confined to the IBM iSeries platform. The product supports manufacturing, distribution, financial, and warehousing capabilities for discrete, repetitive, process and co-existent manufacturing and distribution enterprises.
Another manufacturing-related product that might functionally attract new customers would be MK Manufacturing - a versatile Unix and NT-based ERP solution that supports make-to-order (MTO), configure-to-order (CTO), and make-to-stock (MTS) discrete manufacturing requirements. The caveat, however, is that SSA GT remains focused mainly on IBM platforms and web server technologies (iSeries and WebSphere). Moreover, the interBiz ERP products are backed up well with Warehouse BOSS, a rules-based stand-alone warehouse management system (WMS) and interBiz Logistics, an e-fulfillment distribution management package. Warehouse BOSS, as a matter of interest, exhibited functionality several years ago that many leading WHS vendors have only recently incorporated. Furthermore, the MasterPiece financial management and HRMS product might significantly enhance SSA GT's financial and HR modules' functionality, which have not traditionally been BPCS' strongest area (if not a wide functional gap).
While mergers and/or acquisitions in the mid-market in the recent times are no surprise per se, SSA GT's action might have an additional meaning. Although the acquisition of interBiz by SSA GT should have minimal impact on the global market in the short run, it might have an important psychological effect on existing SSA GT's and interBiz' customer bases. On its hand, the erstwhile SSA has suffered, over the past several years, a tremendous loss of market share and customer confidence, while its channel also dwindled during the same period of time.
Revenues for SSA GT, which is now majority (~60%) owned by a $6.5 billion high-tech venture capital firm Cerberus and ~20% by Gores Technology, were $126 million for fiscal 2001 ended on July 31, 2001, with an undisclosed profit. It is still only a fraction of once SSA's over $450 million turnover in the mid 1990s, though. Therefore, SSA GT, having gone through its bankruptcy and rebirth initially under the Gores Technology in 2000, remains within Top 20 ERP vendors, steeply down from once being neck to neck with J.D. Edwards.
The vendor has undergone considerable turmoil even post-purchase, with new management teams' rotations, a new owner and considerable staff departures, and consequently, a loss of some of its customer base to competitors. But that base remains large with 6,500 customers running on BPCS, evenly divided between North America, Europe and Asia-Pacific, although around 3,500 of these are not still currently paying maintenance.
Through the acquisition, SSA GT believes it is on a path to regain a leading position in its target markets by solving industry-specific business challenges and creating a heterogeneous application environment that works seamlessly with other back-office applications. The combined company will serve more than 9,000 longstanding, market-leading companies in over 90 countries from more than 70 offices worldwide. On the other hand, CA, which is under investigation by the Justice Department and the Securities and Exchange Commission (SEC) for alleged accounting irregularities, said in a statement that it will focus on its core enterprise-management, security, storage, application development, integration, business-intelligence, and portal offerings.
SSA GT has pledged continued support for the interBiz product lines, along with assurance that it will enhance the applications. Furthermore, in some instances where it will make sense, there will be an effort to integrate the products as well as provide a migration plan for products using discontinued technologies, such as the HP 3000 platform. Through the transaction SSA GT hopes to achieve the following:
* Offer customers added support through an expanded global network; additional revenue to spend on research and development and expanded Global Guide Groups to understand customer, industry and market demands
* Provide the critical mass to re-position itself as a leading vendor in specific vertical markets, expanding its global capabilities, resources and customers
* Leverage the company's global service and support functions
* Underscore its business model, and financial viability
* Strengthen organic growth in its key vertical markets - automotive, fast moving consumer goods (including food, beverage and electronics), general manufacturing and pharmaceutical industries;
* Expand its commitment to deliver more opportunities for customers' e-commerce and collaboration initiatives
* Add experienced management and IT professionals in the U.S. and International markets.
Over the past year, SSA GT has been reengineering its company to deliver a solution strategy that involves e-commerce and collaboration with BPCS, its core ERP product. SSA Global Technologies will apply its business model and solution strategy to the newly acquired products. For customers utilizing the interBiz brands, this strategy will give them new opportunities to benefit from e-business and collaboration solutions. Products covered under this transaction include CAS, interBiz Logistics, interBiz Online, interBiz Reports, KBM, MANMAN, Masterpiece/Net, MasterPiece/Net HRMS, MAXCIM, MK Logistics, MK Manufacturing, PRMS and Warehouse BOSS. A fully integrated organizational structure is in place for SSA GT where employees are being integrated, service offerings are being coordinated and cross-selling opportunities pursued.
In a nutshell, the good news is - a foster home has been found for interBiz; but there is the bad news too - the room space might be insufficient to accommodate all of the orphaned products. Nevertheless, SSA GT is, for a number of reasons, possibly the best place where most of interBiz products will continue to be kept on a life support. There are seemingly many synergies that could exist between the two product lines/organizations, including the cited closeness of product codes (considered ancient by many, as they go as far back as COBOL or FORTRAN) at the base level and both camps' heavy reliance on mature IBM iSeries (formerly AS/400) platform. These sorts of blessings in disguise could still allow SSA GT to build on its core ERP transactional capabilities while being able to offer extensions to the core products, something not many other ERP vendors that are relying heavily on the latest 'hot button' technologies (e.g., Java or .NET) would be willing to undertake. Also the companies have similar corporate cultures and have long been competing in the same or similar markets. They both have extensive worldwide coverage, and both companies' staff members have extensive manufacturing and distribution industrial experience.
At a first glance, one can even notice a complementary nature of some products. Some of the interBiz products may indeed still provide a 'kick for a buck' proposition. For instance, PRMS is still a well respected manufacturing ERP offering and a formidable competitor to SSA GT's BPCS, although it is perceived as ancient in the market and has been confined to the IBM iSeries platform. The product supports manufacturing, distribution, financial, and warehousing capabilities for discrete, repetitive, process and co-existent manufacturing and distribution enterprises.
Another manufacturing-related product that might functionally attract new customers would be MK Manufacturing - a versatile Unix and NT-based ERP solution that supports make-to-order (MTO), configure-to-order (CTO), and make-to-stock (MTS) discrete manufacturing requirements. The caveat, however, is that SSA GT remains focused mainly on IBM platforms and web server technologies (iSeries and WebSphere). Moreover, the interBiz ERP products are backed up well with Warehouse BOSS, a rules-based stand-alone warehouse management system (WMS) and interBiz Logistics, an e-fulfillment distribution management package. Warehouse BOSS, as a matter of interest, exhibited functionality several years ago that many leading WHS vendors have only recently incorporated. Furthermore, the MasterPiece financial management and HRMS product might significantly enhance SSA GT's financial and HR modules' functionality, which have not traditionally been BPCS' strongest area (if not a wide functional gap).
While mergers and/or acquisitions in the mid-market in the recent times are no surprise per se, SSA GT's action might have an additional meaning. Although the acquisition of interBiz by SSA GT should have minimal impact on the global market in the short run, it might have an important psychological effect on existing SSA GT's and interBiz' customer bases. On its hand, the erstwhile SSA has suffered, over the past several years, a tremendous loss of market share and customer confidence, while its channel also dwindled during the same period of time.
Revenues for SSA GT, which is now majority (~60%) owned by a $6.5 billion high-tech venture capital firm Cerberus and ~20% by Gores Technology, were $126 million for fiscal 2001 ended on July 31, 2001, with an undisclosed profit. It is still only a fraction of once SSA's over $450 million turnover in the mid 1990s, though. Therefore, SSA GT, having gone through its bankruptcy and rebirth initially under the Gores Technology in 2000, remains within Top 20 ERP vendors, steeply down from once being neck to neck with J.D. Edwards.
The vendor has undergone considerable turmoil even post-purchase, with new management teams' rotations, a new owner and considerable staff departures, and consequently, a loss of some of its customer base to competitors. But that base remains large with 6,500 customers running on BPCS, evenly divided between North America, Europe and Asia-Pacific, although around 3,500 of these are not still currently paying maintenance.
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