Epicor Software Corporation (NASDAQ: EPIC) and Scala Business Solutions (formerly Euronext: A.SCALA, delisted in July 2004), an Amsterdam, the Netherlands-based provider of collaborative enterprise software for mid-size enterprises and subsidiaries of global corporations, have completed a merger that began in late 2003. The merger creates the largest independent global mid-market provider of collaborative ERP, customer relationship management (CRM), and supply chain management (SCM) applications based on Microsoft's .NET platform and Web services, with approximately $250 million (USD) annual revenues, nearly 1,500 employees, and with over 20,000 customers. The combined company has an expanded global presence with operations and customers in 143 countries, including worldwide coverage of sales, consulting, and support for mid-market and large multinationals as well as local enterprises, offering a broad suite of integrated solutions.
If for nothing else, the acquisition should result in minor functional overlap or possible adversarial internal competition between the respective product lines and target industries, while producing at least the following two apparent synergies between the two merged companies
1) geographical coverage—Epicor has a strong presence in the US, where Scala has never succeeded to develop an infrastructure, while Scala can provide a conduit for Epicor's entry into many Eastern European and Asian markets that it could ill-afford to tackle alone (whereas in some regions like the UK, Australia-Pacific, or South Africa the vendors can join existing force and possibly rationalize them, with resulting operational synergies), and
2) the strong relationships that both independently have with Microsoft.
Namely, Microsoft recently acknowledged Scala as one of its most important partners when Scala was selected as one of fourteen European independent software vendors (ISV) to participate in Microsoft's early adopter program for the emerging business application platform, code-named Microsoft Business Framework (MBF). This means that Scala might be able to accelerate delivery to market of additional iScala functionality in the coming years in response to possibly strong customer demand. With the support for XML and Microsoft BizTalk Server, Scala offers e-commerce applications that are tightly integrated to the Scala back-office, as well as the interconnectivity to third-party products. The Scala Connectivity solutions architecture (that includes iScala Data Exchange Server and the iScala Manager) provides a way of directly remotely accessing the functionality within the ERP system, in such a way that does not compromise its business rules and security. Scala has already released support (i.e., exposed through XML web services) for over sixty of the most common business processes and documents, including orders, delivery documents, invoices, etc., and is regularly releasing more.
On the other hand, Epicor has embraced .NET even more zealously than its creator Microsoft, often leaving Microsoft staffers in their development labs with their dropped jaws. As a good example, over two years ago, the vendor released Clientele CRM .NET as a pure .NET-based product (see Epicor Claims the Forefront of CRM.NET-ification). Further, at the company level, Epicor's standardized technology direction currently embraces the Microsoft .NET Platform for XML-based Web services. Through .NET, which is the next generation of Microsoft's Distributed interNet Applications Architecture (DNA) and Component Object Model (COM), the vendor hopes to be able to provide comprehensive support for Web services deployment and enterprise application integration (EAI).
This technology strategy should enable Epicor's still diverse development teams to leverage Microsoft technology, while allowing each product group to continue using the individual databases and development tools appropriate to the requirements of each product's target market. For example, with the release 6.0 of both the Vantage and Vista manufacturing products early in 2003, Epicor executed on a critical milestone of its manufacturing product roadmap—incorporating a single application framework across the two solutions through the alliance with Progress Software Corporation, as well as with Sonic Software Corporation for its enterprise service bus for transactions services and security.
Furthermore, in late 2004, Epicor will introduce its .NET-based Vantage 8.0 manufacturing solution (formerly code named Project Sonoma), which features an n-tier architecture that has been architected from the ground up to support the .NET platform and Web services. Rather than wrapping existing applications with Web service-like interfaces, the new Vantage and Vista presentation layer has completely been rewritten in C# and Visual Studio.NET, while the extensive business logic has been preserved and wrapped around with stateless Web services (i.e., which are connected or invoked only when the information is needed).
The platform will supposedly deliver unrivalled flexibility and performance for both developers and customers, and allow for the development of applications based on Web services that have either a smart client or browser-based UI. Version 8.0 will include frameworks for exposing all applications interfaces as Web services, plus an orchestration engine for constructing composite applications using both Microsoft BizTalk Server and Sonic. The solution aims at enabling all (both existing and future) Epicor manufacturing customers to adopt Web services piecemeal, on their own time frame, while protecting the existing technology investment, since software reuse and integration have been on Epicor's mind during the software revamp.
Also at the corporate level, the vendor has incorporated numerous features into its UIs to simplify the operation of and access to all its products, which incorporate the popular Microsoft Windows graphical user interface (GUI). Epicor's GUI tools include industry-standard field controls, pull-down menus, tool bars, and tab menus that facilitate the use of the software, while the products incorporate the latest and most advanced GUI features such as process wizards, cue cards, advanced on-line help, and on-line documentation, based upon today's single document interface (SDI) standards. As the model for distributed computing continues to evolve through the advent of Internet technologies, Epicor also offers additional client deployment models, including thin-client, browser-based, and mobile client access.
Therefore, Epicor has lately created three diverse and yet streamlined product lines (i.e., Epicor Vantage, Epicor iScala, and Epicor Enterprise) that cover different industries (i.e., distribution, industrial, manufacturing, services, non profit, and hospitality verticals) with a minimal overlap, which should mean more opportunities without much clash amongst different sales forces. Epicor is striving to become a cross-trained, functional organization, given some cross-selling opportunities in hospitality, as well as localization of manufacturing with Scala accounting and payroll solutions. However, the other side of the coin is that because of these seemingly unrelated product lines, Epicor may mean different things to different people, which does not really help mind share creation in particular segments of interest.
Epicor, as well as its product groups, have had a share of tough history that they now must get far beyond to gain traction in the market. For example, first DCD, then DataWorks, and then Epicor's Manufacturing Solutions Group, the reborn manufacturing group must remind its customers and the marketplace of its historic success and forget about so many years of financial pressures which nearly sunk it into oblivion. There would be an analogy with the Epicor Enterprise Solutions group, that started as Platinum, and has meanwhile been awkwardly and confusingly till recently referred to as the "e by Epicor" umbrella brand. Consequently, since the late 90's Epicor's business has been less visible to the market, and customers and the marketplace may have forgotten who Epicor Manufacturing or Epicor Enterprise are and what they represent. The positive industry coverage for the last two years for its plausible strategy, modern products, and record performance are certainly a great step in the right direction.
If for nothing else, the acquisition should result in minor functional overlap or possible adversarial internal competition between the respective product lines and target industries, while producing at least the following two apparent synergies between the two merged companies
1) geographical coverage—Epicor has a strong presence in the US, where Scala has never succeeded to develop an infrastructure, while Scala can provide a conduit for Epicor's entry into many Eastern European and Asian markets that it could ill-afford to tackle alone (whereas in some regions like the UK, Australia-Pacific, or South Africa the vendors can join existing force and possibly rationalize them, with resulting operational synergies), and
2) the strong relationships that both independently have with Microsoft.
Namely, Microsoft recently acknowledged Scala as one of its most important partners when Scala was selected as one of fourteen European independent software vendors (ISV) to participate in Microsoft's early adopter program for the emerging business application platform, code-named Microsoft Business Framework (MBF). This means that Scala might be able to accelerate delivery to market of additional iScala functionality in the coming years in response to possibly strong customer demand. With the support for XML and Microsoft BizTalk Server, Scala offers e-commerce applications that are tightly integrated to the Scala back-office, as well as the interconnectivity to third-party products. The Scala Connectivity solutions architecture (that includes iScala Data Exchange Server and the iScala Manager) provides a way of directly remotely accessing the functionality within the ERP system, in such a way that does not compromise its business rules and security. Scala has already released support (i.e., exposed through XML web services) for over sixty of the most common business processes and documents, including orders, delivery documents, invoices, etc., and is regularly releasing more.
On the other hand, Epicor has embraced .NET even more zealously than its creator Microsoft, often leaving Microsoft staffers in their development labs with their dropped jaws. As a good example, over two years ago, the vendor released Clientele CRM .NET as a pure .NET-based product (see Epicor Claims the Forefront of CRM.NET-ification). Further, at the company level, Epicor's standardized technology direction currently embraces the Microsoft .NET Platform for XML-based Web services. Through .NET, which is the next generation of Microsoft's Distributed interNet Applications Architecture (DNA) and Component Object Model (COM), the vendor hopes to be able to provide comprehensive support for Web services deployment and enterprise application integration (EAI).
This technology strategy should enable Epicor's still diverse development teams to leverage Microsoft technology, while allowing each product group to continue using the individual databases and development tools appropriate to the requirements of each product's target market. For example, with the release 6.0 of both the Vantage and Vista manufacturing products early in 2003, Epicor executed on a critical milestone of its manufacturing product roadmap—incorporating a single application framework across the two solutions through the alliance with Progress Software Corporation, as well as with Sonic Software Corporation for its enterprise service bus for transactions services and security.
Furthermore, in late 2004, Epicor will introduce its .NET-based Vantage 8.0 manufacturing solution (formerly code named Project Sonoma), which features an n-tier architecture that has been architected from the ground up to support the .NET platform and Web services. Rather than wrapping existing applications with Web service-like interfaces, the new Vantage and Vista presentation layer has completely been rewritten in C# and Visual Studio.NET, while the extensive business logic has been preserved and wrapped around with stateless Web services (i.e., which are connected or invoked only when the information is needed).
The platform will supposedly deliver unrivalled flexibility and performance for both developers and customers, and allow for the development of applications based on Web services that have either a smart client or browser-based UI. Version 8.0 will include frameworks for exposing all applications interfaces as Web services, plus an orchestration engine for constructing composite applications using both Microsoft BizTalk Server and Sonic. The solution aims at enabling all (both existing and future) Epicor manufacturing customers to adopt Web services piecemeal, on their own time frame, while protecting the existing technology investment, since software reuse and integration have been on Epicor's mind during the software revamp.
Also at the corporate level, the vendor has incorporated numerous features into its UIs to simplify the operation of and access to all its products, which incorporate the popular Microsoft Windows graphical user interface (GUI). Epicor's GUI tools include industry-standard field controls, pull-down menus, tool bars, and tab menus that facilitate the use of the software, while the products incorporate the latest and most advanced GUI features such as process wizards, cue cards, advanced on-line help, and on-line documentation, based upon today's single document interface (SDI) standards. As the model for distributed computing continues to evolve through the advent of Internet technologies, Epicor also offers additional client deployment models, including thin-client, browser-based, and mobile client access.
Therefore, Epicor has lately created three diverse and yet streamlined product lines (i.e., Epicor Vantage, Epicor iScala, and Epicor Enterprise) that cover different industries (i.e., distribution, industrial, manufacturing, services, non profit, and hospitality verticals) with a minimal overlap, which should mean more opportunities without much clash amongst different sales forces. Epicor is striving to become a cross-trained, functional organization, given some cross-selling opportunities in hospitality, as well as localization of manufacturing with Scala accounting and payroll solutions. However, the other side of the coin is that because of these seemingly unrelated product lines, Epicor may mean different things to different people, which does not really help mind share creation in particular segments of interest.
Epicor, as well as its product groups, have had a share of tough history that they now must get far beyond to gain traction in the market. For example, first DCD, then DataWorks, and then Epicor's Manufacturing Solutions Group, the reborn manufacturing group must remind its customers and the marketplace of its historic success and forget about so many years of financial pressures which nearly sunk it into oblivion. There would be an analogy with the Epicor Enterprise Solutions group, that started as Platinum, and has meanwhile been awkwardly and confusingly till recently referred to as the "e by Epicor" umbrella brand. Consequently, since the late 90's Epicor's business has been less visible to the market, and customers and the marketplace may have forgotten who Epicor Manufacturing or Epicor Enterprise are and what they represent. The positive industry coverage for the last two years for its plausible strategy, modern products, and record performance are certainly a great step in the right direction.
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