Posts Tagged ‘mergers’

News Analysis: Spigit Buys CrowdCast To Corner Innovation Life Cycle Market

On September 18, 2012, Pleasanton, CA based Spigit, a social innovation vendor acquired Crowdcast, a San Francisco based social business intelligence pioneer for an undisclosed sum.  Crowdcast Founder/CEO Mat Fogarty and Chief Scientist Leslie Fine will join Spigit’s executive team as part of the acquisition. Crowdcast is backed by Menlo Ventures and Alsop Louie Partners.

Spigit, which has raised over $26M to date, brings 1200+ worldwide customers that can benefit from the Crowdcast offering.  Key customers include MetLife, American Express, Walmart, GE, Pepsico, Nike, Merck, Sprint, Farmers Insurance, CapGemini, and Warner Brothers.  Crowdcast customers include SAP, Boeing, Hershey’s, iARPA, and Electronic Arts.

This acquisition signifies larger trends for customers in the crowdsourcing and innovation market who:

  • Seek the ability to move from crowd sourced data to actionable decisions. Founded in 2007, Crowdcast allows companies to crowd source organizational knowledge and intelligence from employees and partners to improve decision making.  Crowdcast tracks and rewards employees for their accuracy in predictions.  Meanwhile, Spigit Engage provides the key tools  to match social collaboration with traditional work flow. Spigit ICON supports ideation via a question and answer format. As part of the agreement, Spigit will add four Crowdcast patents to its patent portfolio.

    Point of View (POV):
    Spigit’s core customers expect to move beyond social collaboration and ideation in isolation.  Spigit’s integration with Sharepoint, Yammer, Jive, and Facebook will expand the reach of these solutions through partnerships.  In addition, Spigit’s core offerings, Engage and ICON, support the innovation process from concept to execution while Crowdcast delivers innovation from post execution to prediction.  Pairing these two powerful capabilities closes the loop from data to decisions.  With informed people and processes, organizations can seek follow-through to decisions and actions from crowd sourced data.  Should the combined entity achieve integration, customers will achieve this end to end capability.
  • Expect to transform innovation from art to discipline.  As part of the agreement, Spigit will add all of Crowdcast’s patents to its portfolio.  The combination allows customers to take traditionally qualitative approaches and craft repeatable and quantifiable results.

    More…

News Analysis: Epicor Acquires Solarsoft, Moves Closer To $1B in Annual Revenues

In Epicor’s first major acquisition since Apax partners brought Activant and Epicor together, the near $900M Dublin, CA-based enterprise software announced its acquisition of Solarsoft from Marin Equity Partners.   Based in the UK, Solarsoft focuses on MES, ERP, and distribution software in specialty verticals for over 2500 customers.  Terms of the deal were not disclosed.  Expected ramifications from the deal include:

  • Solarsoft bringing deeper micro-vertical expertise to Epicor. Solarsoft’s offerings reflect a mini-version of Epicor.  Covering the manufacturing and distribution capabilities, key verticals include automotive, building and construction, discrete manufacturing, food and beverage, general distribution, hi-tech product distribution, mills metals and chemicals, print packaging manufacturing, pharma and cosmetics, plastics and rubber, process manufacturing, and stamping forge and casting. Solarsoft brings MES capabilities to Epicor.

    Point of View (POV):
    In the latest Constellation Report on mid-market buyers, peace of mind and deep industry vertical were the two topics buyers sought from their solution provider.  Constellation expects growth in the micro-vertical process manufacturing areas, distribution, and  the MES solutions.  Solarsoft complements many of the legacy Activant distribution micro verticals.  Meanwhile, Epicor currently lacks a food and beverage offering which is a core Solarsoft strength.  With strong growth expected in Latin America, China and India, this market lacks many modern options for traceability and modern food and beverage requirements.  Natural resources will also receive a boost providing a competitor to JD Edwards as Solarsoft recently acquired Progressive Solutions which was a leader in the lumber and building materials supply chain.
  • Epicor driving to global class economies of scale. Solarsoft’s annual revenues were estimated to be $100M.  Epicor’s estimated revenues are $850 for 2012.  Upon closure of the acquisition, Epicor will remain a stone’s throw away from the magical $1B mark.  Solarsoft adds 400 employeees to the overall coverage areas and brings technical expertise in barcode automation, wireless technologies, cloud, mobile, and real-time production systems.

    (POV):
    At $1B, Epicor will achieve a greater scale in back office operations and research and development.  Epicor has always supported global operations for the small to mid-market.  As Epicor moves more towards more micro-verticals, those economies of scale enable Epicor to focus deeper on last mile vertical solutions and provide the sales and support infrastructure expected in a maturing ERP market.  Epicor’s ability to go from shop floor to distribution provides a single source for many customers.  Epicor must also service almost $600M in accumulated debt from previous mergers and acquisitions.

The Bottom Line: Epicor’s Acquisitions Enable Market Viability and Vertical Industry Specialization

In less than a decade, the market has moved from 100 ERP vendors to about a dozen that matter. Epicor’s ability to continually acquire and innovate sets it apart in the market place.  As one of the few vendors who made the transition to a fully multi-tenant SaaS/Cloud ready SOA architecture, Epicor has a modern platform that can be applied to acquisitions over time.  Despite the diminished ERP choices in the market place, customers will find that consolidation will bring more vertical and industry specialization to the market.   Mid market vendors such as Epicor must go micro vertical, mobile, and cloud to win over SAP and Oracle customers.

Your POV.

Have you considered Epicor in the past 12 months?  What do you think of the acquisitions strategy?  Are you a midmarket organization looking for help in vendor selection and software strategy?  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2012 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

News Analysis: Infosys Buys Lodestone for $350M

Global outsourcing and Bangalore Infotech bellwether Infosys (NASDAQ:INFY), announced its agreement to purchase Zurich-based Lodestone Management Consultancy for $350M.  A quick analysis of the news reveals:

  • Infosys strengthens its EMEA and SAP vertical presence. Lodestone brings 850 employees which 750 are front line delivery personnel. Lodestone’s 200 clients span industries such as life sciences, consumer goods, automotive, financial Services,  banking and industrial equipment. across a profitable and strategic SAP customer base.

    Point of View (POV):
    The Lodestone acquisition gives Infosys a profitable and strategic SAP customer base.  While some may say this acquisition, which has taken some time to complete, is a late response to the July 2009 HCL – Axon acquisition, Constellation believes this is part of a larger but more conservative approach to shore up Infosys’ EMEA strategy.  In the short term, the economics of EMEA will work against Infosys as Eurozone concerns amplify into 2013.  Long-term, the acquisition may prove itself out as Infosys gains a greater foothold through consolidation.  Constellation estimates $1B in revenues from SAP alone post merger.
  • Lodestone methodology and culture will transform Infosys. Lodestone brings it’s trademark IDEA methodology.  IDEA represents insight, design, execute, and achieve.  This approach aligns with Six Sigma standards and SAP ASAP to improve the quality of implementation outcomes.

    Point of View (POV):
    Infosys can gain from learning the IDEA approach in achieving business transformation across the project life cycle.  More importantly, Infosys gains deep local expertise in a wide range of SAP dominant industries.  Constellation believes the goal is to build out the Infosys 3.0. strategy, which is about expanding into management consulting and systems integration and away from outsourcing.

The Bottom Line: Traditional BPO Models Have Run Their Course and Traditional Outsourcers Must Act Quickly Or Suffer

With the growing backlash on outsourcing in the US elections spreading to continental Europe, traditional BPO models may no longer provide growth.  India’s info-tech giants must take the path to the next level and focus on IP innovation and creation (see Figure 1).   While these are new skill sets required to deliver the next generation of IT services, the shift will take time and a cultural revolution.  Can India’s infotech companies make the shift to a cloud meets subscription economy?  Will the shift from trusted advisor to innovation partner happen quickly enough?  Every global outsourcer faces these same questions amidst consumerization of IT, the rise of cloud computing, and oppression and domination by the mega software ecosystems.

Figure 1.  The Path From Body Shop Provider to High Value Creator

Your POV.

Are you ready for the new Infosys? Do you think they can make the shift from outsourcer to management consultancy?  Let us know your experiences.  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Related Constellation Research

Wang, R. “Best Practices – Three Simple Software Maintenance Strategies That Can Save You Millions” Constellation Research, Inc. March 8, 2012

Scavo, Frank & Wang, R. “Big Idea: Constellation’s Business Value Framework” Constellation Research, Inc.  January 31, 2012.

Wang, R. “Best Practices: Why Every CIO Should Consider Third-Party Maintenance.” Constellation Research, Inc. August 7, 2012.

Wang, R. “Market Overview: The Market For SAP Optimization Options” Constellation Research, Inc. May 11, 2011.

Wang, R. “Best Practices: The Case for Two-Tier ERP Deployments” Constellation Research, Inc. February 28, 2011.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2012 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

Trends: The Battle For CMO Mind Share

Marketing and Advertising Budgets Are The New Land Grab

Constellation Research, Inc. predicts that the global advertising market (paid search, display, and classified) will hit $125B by 2015.   While IT budgets continue to stay flat, marketing budgets are up.  Warc’s recent Global Marketing Index (GMI) entered positive territory in March 2012.  Consequently, the heat up in marketing and advertising market attracts not only start-ups, but also tech vendors looking to enter this lucrative market.

Solution Providers Rediscover The CMO Budget

In just less than 28 months, enterprise software vendors have bolstered their presence with Chief Marketing Officers mostly through acquisitions and partnerships.  The goal – capture budgets allocated for digital creation, marketing automation and revenue optimization, advertising, CRM and customer experience, analytics, and information brokering (see Figure 1).

Figure 1.  The Battle For The CMO Budget Comes From Six Fronts

Why the change? Marketing sits at the cross roads between the old analog world and the new shift to digital transformation.  With each big shift, organizations will change what technologies they invest in, who they decide to partner with, and how quickly they will make the shift.  This new battle for CMO mind share started when IBM purchased Unica for $480M in August 13, 2010 (Figure 2).  The frenzied activity by Adobe, Dell, Eloqua, Google, Hubspot, Kana, Marketo, Oracle, Salesforce.com, and SAS Institute reflect the desire to be top of mind among CMO budgets.

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News Analysis: IFS Acquires Metrix To Boost Mobility And Service Management

Mobility and Scheduling Play A Key Role In IFS Service Management Strategy

On May 23rd, IFS acquired Metrix, a service management and mobility vendor headquartered in Waukesha, Wisconsin.  IFS adds 90 customers with Metrix.  Key highlights of the acquisition include:

  • Expansion into new markets. Metrix Service Management provides a field service management and depot repair solution for high volume service industry segments.  Metrix succeeds in key industries such as Asset & Capital Equipment, Telco, High-Tech & Medical, and Defense.  Key brands among the 90 new customers include Ericsson, Motorola, Xerox, DHL and ITT to IFS’ portfolio.  Other key offerings include service contact center, service scheduling, contract management, warranty management, and service project management.

    Point of View (POV):
    Metrix’s products allows customers to automate mobile field service, streamline repair processes, improve customer service, and increase service profitability.  While, IFS pioneered service management for many areas including asset intensive industries, the Metrix acquisition opens up the profitable North American market.  Deployment modes in SaaS will allow IFS to quickly cross-sell to existing customers and bring in new prospects.  Along with a robust field service management solution, Metrix delivers a solid reverse logistics solution that encompasses service repair, returns management, warranty management, and service parts logistics. IFS could benefit from this in-house capability to expand current offerings.
  • Advancing into mobile apps. The Metrix solution provides a broad solution across the enterprise (see Figure 1).  Agents gain mobile reporting tools, assess customer satisfaction with in the field customer surveys, and optimize receiving and shipping management tasks.  Other mobile use cases include the ability to verify customer history and product warranties, track serialized part inventories and repair stock, and enjoy one-click customer calling and emailing.  The solution currently supports Windows and Android.  Metrix Mobile contains a development framework and a set of off-line applications for field service and maintenance that support Android, Microsoft Windows Mobile, Windows 7 and Windows 8.

    Point of View (POV):
    Metrix improves IFS’ capability in delivering both on-line and importantly off-line solutions.  Should IFS complete integration of Metrix to IFS applications, customers will gain the benefits of an integrated mobile application.  Lack of native iPhone support should not immediately impact the market, due to the lack of ruggedized devices on Apple. Long term, the lack of offline, store and forward capabilities for  iOS support creates a huge hole in the portfolio as iOS penetration increases across the enterprise at a geometric growth rate.  IFS does provide full online support of the iPad in the full suite of IFS applications.
  • Delivery of integrated scheduling with field service. Integration with 360 Scheduling delivers advanced resource optimization.  Metrix already had a partnership with 360 Scheduling.

    Point of View (POV):
    Integration with 360 Scheduling allows IFS and Metrix to take advantage of their proven algorithms that go beyond the legacy batch scheduling, business rule, optimization approaches.  Integration with Metrix enables customers to address planned and unplanned demand forecasting, skills gaps, location optimization, resource optimization, and profitability.

Figure 1. The Broad Range Of Mobile Scenarios Supported By IFS Applications More…

News Analysis: The Implications Of Oracle’s Acquisition Of Taleo

Catch my colleague Yvette Cameron’s point of view here. She covers Future of Work for Constellation Research, Inc.

Oracle Plays Catch Up With Public Cloud Ambitions

On February 9th, Oracle announced its intention to acquire Dublin, CA based Taleo for $1.9B.  Taleo is a cloud based talent management software provider with 5000 customers and 1400 employees.   Key take aways to consider:

  • Moves by SAP and Oracle intend to compete with next generation cloud HCM companies. Taleo provides recruiting and on boarding, performance management and goal setting, compensation, succession, and learning and development.  This complete suite tied to reporting and analytics is designed to streamline human resource operations and employee career management across retail and hospitality, travel, healthcare, media and entertainment, financial services, technology, and energy and mining.  Marquee customers include Starbucks, Starwood, Hyatt, JP Morgan Chase, HP, Dell, Conde’Nast, United, American Airlines, Tesora, Blue Cross blue Shield, and Sutter Health.to customers.

    Point of View (POV):
    Oracle sees advantages in acquiring a leading player in the talent management space .  For years, both Taleo and SuccessFactors ate into Oracle’s existing customer base for talent management.  Consequently, other cloud based HCM and HR Tech vendors such as Ceridian, CornerStone OnDemand, FairSail, Kinexa, UltimateSoftware, and Workday continue to attract line of business customers looking for innovations not being delivered by their core HCM providers (i.e. Oracle, PeopleSoft, SAP).  More importantly, cloud computing if properly designed can improve the pace of innovation delivered to customers.
  • Oracle continues to buy its way into a public cloud. Oracle continues to react to buyer sentiment and preference for cloud based solutions with this second major acquisition in what they term the “public cloud” space.  Oracle purchased RightNow for $1.43B on October 24th to address its gaps in customer service solutions.  The Taleo purchase addresses a gap in Talent Management solutions that rival SAP plugged with its recent acquisition of Success Factors for $3.4B .

    Point of View (POV):
    These defensive plays indicate a realization that Cloud delivery emerges as the predominant option for applications. Based on Oracle’s current road map, one can expects Oracle to acquire its way into many other edge applications not listed on its Public Cloud road map (see Figure 1).  Some other applications could include social business solutions, expense management, learning solutions, pricing management, identity management, and mobile device management.   However,  Oracle’s public cloud acquisition strategy so far lacks a key requirement – a choice for multi-tenant architected solutions.  While both RightNow and Taleo have some modules that are multi-tenant, in most instances, these applications have been delivered in single tenancy or in multi-instance. Multi-tenant solutions will provide clients with the most efficient upgrade path and lowest long-term cost structure.  The lack of a public strategy to address this issue remains a significant concern for customers and industry observers.

Figure 1. Oracle’s Vision For A Public Cloud

Source: Oracle Corporation

 

  • Seats matter most in a world of CoIT. Oracle hopes to gain massive cloud scale through Taleo’s 74 million transactions per day and 240 million candidates on Taleo Talent Exchange.  The sheer number of users is massive.

    POV:
    Unlike CRM or ERP, the play for HR is all about acquiring the biggest base of users – employees.  With consumerization of IT (CoIT) in full swing, the goal is to grab as many users upfront and then over time cross-sell them into other edge applications which converge between enterprise and consumer.  Why?  The new strategy among the enterprise apps vendors is land and expand. The largest active user bases will win the war of attrition.

The Bottom Line for Customers: Goodbye On-Premises, Hello Cloud World!

More…

News Analysis: SAP Buys SuccessFactors for $3.4B Signals SAP’s Commitment To Cloud, HCM, and Social

SuccessFactors Acquisition Puts SAP In Direct Competition With Workday And Taleo

SAP (NYSE:SAP) announced its $3.4B acquisition of SuccessFactors (NYSE: SFSF) as it seeks to bolster its position in the Cloud and more importantly in the rapidly growing strategic HCM market.  Based in San Mateo, CA, USA, SuccessFactors brings over 15 million subscription users from 3,500 customers in 168 countries.  The company has 1450 employees and has been one of the SaaS/Cloud darlings of the industry.  When completed, SuccessFactors will remain an independent entity renamed, SuccessFactors, an SAP company.  Lars Dalgaard, Founder and CEO, SuccessFactors will lead the cloud business for SAP.  A quick analysis of the news reveals:

  • SAP seeking a comprehensive and complementary HCM solution. SAP believes the combination of SuccessFactors and SAP will create a comprehensive HCM solution, marrying strength in enterprise applications with people-focused cloud applications. Today, SAP serves the market with a comprehensive and international Core HR and payroll.  Other on-premise offerings include talent management, workforce analytics, and shared services delivery. Key offerings from SuccessFactors include areas such as talent management, recruiting management, goal management, performance reviews, and business execution.  Further, SAP believes the core SFSF offerings will be an attractive to more than 500 million employees of SAP customers .  SAP has 15,000 HCM deployments (not customers) that could benefit from one-stop shopping.

    Point of View (POV):
    While the core offerings provided a solid approach, these applications remained in the systems of transaction world and lacked many of the newer requirements for systems of engagement.  In fact, many customers left SAP to go to SuccessFactors to accelerate innovation in the talent space. The rise of Taleo, Workday, and Ultimate Software comes from the lack of general innovation in the HCM space by legacy vendors such as Oracle, PeopleSoft, and SAP.  Cloud computing provided the opportunity to deliver rapid innovation to customers.  Consequently, existing customers will welcome the move while best of breed purists will have to overcome the surprise and determine how innovative they expect SAP to become in HCM.
  • SuccessFactors’ provides SAP with massive cross-sell opportunities. SAP believes the core SFSF offerings will be an attractive to more than 500 million employees of SAP customers .  SAP has 15,000 HCM deployments (not customers) that could potentially go for one-stop shopping from SAP.

    Point of View (POV):
    SAP sees the acquisition as a great cross-sell opportunity for other cloud apps and analytics.  Other opportunities include CRM, Collaboration, Travel, and Procurement in the cloud.  In the past two years, Success Factors has made the shift to focus on business performance execution and provides a real time decision making platform.  While customers can acquire a solution from one vendor, the integration of the various cloud platforms may prove to be a challenge.  However, from a financial play, Co-CEO, Bill McDermott sees this as an easy way to meet his 2015 target of €20billion and move towards the 35% margin he seeks to bring shareholders.

News Analysis: Oracle Buys RightNow For $1.43B

The Acquisition Machine Heads To The Public Cloud

Users gathered at the Customer Summit 2011 at the Broadmoor Hotel woke up to the shocking announcement that Oracle (NASDAQ: ORCL) announced a $1.43B acquisition of leading SMB CRM vendor RightNow Technologies (NASDAQ: RNOW) today.  According to Thomas Kurian, “Oracle is moving aggressively to offer customers a full range of Cloud Solutions including sales force automation, human resources, talent management, social networking, databases and Java as part of the Oracle Public Cloud,” said Thomas Kurian, Executive Vice President, Oracle Development. “RightNow’s leading customer service cloud is a very important addition to Oracle’s Public Cloud.”

A quick analysis of the acquisition reveals:

  • Oracle sees RightNow as an anchor in its public cloud strategy. RightNow signals the first of many acquisitions foundational to a market place strategy.  CRM plays a pivotal role.  Bozeman, Montana based RightNow brings over 2000 customers, and 10 billion transactions per year in volume.  In fact, Kurian’s press statement hints at other areas that include anything from infrastructure to apps.

    Point of View (POV):
    Oracle’s success in the public cloud will require more than just a multi-instance virtualized cloud offering.  The lack of true multi-tenancy will prove to be a detriment to both customers and Oracle.  Oracle will need to deliver a multi-tenant version of Fusion Middleware to provide customers with the full range of deployment option choices from on-premise, hosted, multi-instance, and multi-tenant.  However, investors and customers should view the public cloud as more than an offering or technology play. In fact, this is Oracle’s new merger and acquisition vehicle.
  • Oracle pokes at Salesforce.com on the customer service side. While Salesforce.com would most likely not acquire RightNow, Oracle brings on a key customer service competitor to Salesforce.com and aligns it with the Oracle sales and marketing machine. Meanwhile, Oracle gains an emerging web experience and social experience product line to complement a robust contact center and solid customer experience suite.

    Point of View (POV):
    With most of RightNow’s customers coming from the customer support side of the house, Salesforce.com will feel the heat in the market place.  Despite the Assistly acquisition, Salesforce.com still has a lot of work to move the Service Cloud offering to par with competitors.  Quite frankly, this is a direct attack by Larry Ellison to Marc Benioff in this space.
  • Oracle plans a long term customer experience play. Oracle’s previous acquisitions of FatWire, Endecca, ATG, and Sigma Dynamics signal a potential play to get serious about customer experience management.  Oracle will need to re-purpose assets to the core CRM team to share in the innovation.

    Point of View (POV):
    Social business, online experience optimization, and gamification represent huge holes in Oracle’s product portfolio.  RightNow brings tremendous amounts of thought leadership to the table should Oracle retain the product teams.  More importantly, the SMB focus will help Oracle bring in a new customer base.

The Bottom Line For Buyers:  Proceed With Caution

RightNow customers should shore up existing contracts and extend maintenance and subscription pricing as far out as possible.  As with most acquisitions, expect Oracle to raise rates to fund the acquisition.  Customers and prospects should seek additional guarantees in product road map commitments and service level commitments.

The Bottom Line For Vendors: This Acquisition Makes Little Sense At First.

Vendors and competitors will most likely wonder why Oracle started this process with RightNow.  As with the PeopleSoft and Siebel acquisitions in the past, competitors were caught off guard.  Expect companies such as eGain, Moxie, Mzinga, Taleo, SuccessFactors, Zuora, Xactly, and others to be targets on the buy list.  Had Oracle or another vendor rolled-up the SaaS vendors during the 2008 downturn, they would have only expended less than $1B for all the players smaller than Salesforce.com.  Instead, cloud has now emerged as threat to legacy vendors such as Oracle.  After waiting on the side lines for the right moment, Oracle now enters the ring and will do what it does best – acquire and assimilate innovation.  In the long-term, Oracle will directly compete with Dell, Salesforce.com, and VMWare for the SMB market place via cloud.

Your POV.

Does this announcement surprise you?  Are you a RightNow customer?  Will you be ready to make the leap with Oracle?  What has your experience with Oracle been post acquisition?  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

How can we assist?

Buyers, do you need help with your apps strategy and vendor management strategy?  Trying to figure out how to infuse innovation into your tech strategy? Ready to put the expertise of over 1000 software contract negotiations to work?  Give us a call!

Please let us know if you need help with your next gen apps strategy efforts. Here’s how we can help:

  • Providing contract negotiations and software licensing support
  • Evaluating SaaS/Cloud options
  • Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployments”
  • Designing innovation into end to end processes and systems
  • Comparing SaaS/Cloud integration strategies
  • Assisting with legacy ERP migration
  • Engaging in an SCRM strategy
  • Planning upgrades and migration
  • Performing vendor selection

Related Resources

20111024 IDG News Service – Chris Kanaracus “Oracle buys RighNow for about US $1.5B”

20111024 Wall Street Journal – Matt Jarzemsky “Oracle Buy Cloud-Based Right Now”

20111024 GigaOm – Barb Darrow “Why Oracle paid $1.5B for Right Now”

Related Research

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

Copyright © 2011 R Wang and Insider Associates, LLC All rights reserved.

Quick Take: Infor and Golden Gate Gain Definitive Agreement To Acquire Lawson For $2B

New Firm To Focus On Verticals And Growth Markets

Golden Gate Capital and Infor entered an agreement to acquire Lawson at $11.25 per share.  The transaction is valued at $2B. Following the 7am ET press release,  a conversation with Charles Phillips and Duncan Angove highlighted key elements of the deal:

  • Focus on growth. Infor sees an opportunity to cross-sell products from both companies into the existing 75,000 customer install base.  Lawson’s HCM product line and Infor’s new release of Sun Systems Financials will provide the back office engine that was missing as independent companies.  The firm expects two-tier financials to be a growth opportunity.
  • Commitment to vertical differentiation. Infor’s trengths in distribution, manufacturing, and hospitality will complement Lawson’s core in healthcare, financials, equipment service rental, and public sector. Charles and Duncan both provided compelling examples of how products from both companies could be used to solve industry problems such as nursing shortage and asset management in healthcare. Time and attendance, planning, scheduling, and analytics would come together to solve a difficult customer problem.
  • Investment in integration.  The combined firm intends to focus on bringing applications together through integration.  Initial thoughts are to achive a common customer experience.  The engineering teams will begin with aligning ION to Lawson Process Platform. The goals – ensure that the common user experience layers are delivered adn bringing together common integration points.

More to come later in the day.

Your POV.

Does this announcement surprise you?  Are you a Lawson customer?  What do you think of an Infor takeover?  What do you hope Lawson will do? Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

More…

News Analysis: Salesforce.com Acquires Radian6 For $316M


Salesforce.com Bets Big On Social Media Monitoring And Socialytics

Salesforce’s definitive agreement to acquire Radian6 continues the consolidation of 100′s of social software vendors in the marketplace.  Radian6, a social media monitoring and customer engagement platform, provides tools for companies seeking to harness the power of social media and related social networks.  Most customers utilize Radian6 for brand management and monitoring, sales and lead generation, Social CRM (SCRM), customer service, competitive intelligence, trend analysis, and crisis management.

The company’s focus on the enterprise has paid off with over half of the Fortune 100 deploying Radian6′s products and 1700 customers worldwide.  Marquis customers include AAA, Dell, GE, Kodak, Molson Coors, Pepsico, and UPS.  The deal represents a $256M cash and $50M stock offer.  The following is a first take analysis of how Salesforce.com envisions applying the assets of Radian6 for its customers to:

  • Bring social analytics or socialytics to the Salesforce.com offerings. Sales and Service Cloud will gain new capabilities in social media monitoring and engagement.  Today’s companies seek the tools to bring social customer strategies with existing CRM processes and organizational structures. A social media monitoring and engagement platform provides a critical tool for success in Social CRM (SCRM).

    Point of View (POV):
    While this acquisition does not solve the lack of a good analytics platform in Salesforce.com today, a Radian6 acquisition delivers social analytics or socialytics capabilities for Salesforce.com. customers.  Social media monitoring delivered by Radian6 provides the first step in the journey to engaging customers in social channels.  Advanced users often find they need to couple a sentiment analysis tool such as Clarabridge, Lymbix, SPSS, or Textlytics to improve accuracy. 

    Because Salesforce.com customers have proven to be more cutting edge in adopting disruptive technologies, natural synergies will emerge among these CRM pioneers.  Whether Salesforce.com can build an SCRM solution in parallel remains the bigger question.

  • Apply learnings to the Force.com platform. Salesforce.com hopes its developers will build new products using the Radian6 platform.  The intent is to add social elements into future products.

    POV:
    Force.com currently lacks the social graph required to build social software.  Learnings from Radian6 should help the Force.com team identify the key additions to the platform required to enable social software development.  Developers can expect these offerings to take at least 9 to 12 months to be incorporated into the platform.  More middleware components will be required in the long run.
  • Build a bridge from Chatter to public social networks. Chatter today remains within the closed walls of the enterprise.Salesforce.com sees opportunities to apply Radian6′s engagement platform to expand the capabilities of Chatter.  Expansion into public social networks opens new insights into the enterprise.

    POV:
    Users seek feeds from Facebook, Twitter, YouTube, LinkedIn, and other social media.  Radian6′s engagement platform can quickly be applied to expand Chatter.  The integration will remove a key deficiency with Chatter, an inward only focus.  However, Salesforce.com will have to ensure that the offering meets enterprise class standards and addresses the challenge of information overload in activity streams.

The Bottom Line: Salesforce.com Going After The Five Pillars Of Consumer Technologies For
More…

News Analysis: Infor Extends $1.84B Unsolicited Offer For Lawson

Unsolicited Offer Marks Chuck Phillips’ First Acquisition Attempt At Infor

On March 11th, St.Paul, MN, based Lawson announced that Infor and Golden Gate Capital made a $1.84B unsolicited offer.   This comes after the March 8th news that Lawson retained Barclays Bank to evaluate options.  An acquisition by Infor (the 3rd largest ERP vendor) and Lawson (the 6th largest ERP vendor) could result in:

  • New revenue streams for Infor. As with Lawson, Infor’s revenue mix heavily relies on maintenance revenue.  Despite high estimated retention rates in the 95% range, its estimated that Infor has not successfully grown new license revenue at a rate and pace to keep up with retention losses.  Infor must find new revenue sources to grow and cover its debt obligations while preparing for an anticipated IPO.

    Point of View (POV):
    Lawson’s S3 offerings in human capital management (HCM) software, public sector, and healthcare provide the drivers for growth.  Infor’s lack of a full HCM suite provides many opportunities for a cross-sell Lawson HCM and build on Infor’s Workbrain customer base.  Infor’s Hansen public sector offering will deliver good cross-sell opportunities with Lawson’s Public Sector HCM and Financials offering.  Healthcare will deliver overall incremental revenue growth.
  • Long term economies of scale for Lawson customers. Lawson earned $736.4M in revenues in 2010.  Lawson’s acquisition of Intentia in 2006 was long and hard but provided a global presence and some economies of scale, especially in R&D.  Lawson gained better user experience and a more complete offering through the M3 products.  In general, the acquisition placed Lawson into the Top 10 of ERP vendors by revenue and was seen as successful.  However, cross-sell opportunities did not materialize as intended in the North American market for M3 and for EMEA in S3.  On the positive side, Lawson’s new distribution product resulted in big deals in a very under served market and created growth synergies between S3 and M3.

    (POV):
    From a size and scale perspective Infor will provide significant scale for Lawson customers.  As with the Intentia acquisition, scale could come from the R&D side of the house and of course back office efficiencies.   Given the need to support a large maintenance revenue base, customers can expect continued investment in service, support, sales, and product.  No acquiring vendor would be foolish enough to kill these areas.  Both Infor and Lawson have made steps to adopt Microsoft .NET platforms and coordinated efforts in R&D should provide the necessary scale to advance the technology across the product lines.

More…

News Analysis: Salesforce.com Buys Heroku For $212M – Shows Commitment To Next Gen Apps

Acquisition of Heroku In Line With Platform Future of Salesforce.com

At Marc Benioff’s keynote, the CEO reiterated his commitment to 6 clouds: Sales, Service, Data (Jigsaw), Collaboration (Chatter), Cloud Platform (Force.com), and Database (database.com).  As Salesforce.com continues to diversify its portfolio into adjacent markets, the platform as a service (PaaS) component remains a key area of emphasis.  Without a strong developer ecosystem, the Cloud pioneer would relegate itself to a one-trick pony.  Consequently, the recent VMforce announcement targeted the Java community.  Now Salesforce.com seeks to win the hearts and minds of the Ruby ecosystem.  This platform as a service (PaaS) acquisition is significant because Heroku:

  • Delivers the full Ruby platform. As a multi-tenant platform and hosting environment, Heroku keeps it simple and hides the complexity of servers, infrastructure, slices and clusters from users.  Application code dynamically scales using a technology called the Dyno Grid.  Using compiled slugs, a self-contained and read only version of code, Heroku addresses scalability and high availability for developers in a contained and self-managed system..

    Point of View (POV):
    Next generation apps developers seek the simplicity of not having to manage servers and installs.  PaaS options accelerate time to market for new solution.  Cloud2 will require ultra fast elasticity and Heroku has proven this model out.
  • Serves the hot mobile and social apps market. With over 105,000 mobile and social cloud applications built on Heroku, Salesforce.com intends to provide the leading platform for next gen apps development.   Heroku delivers the backbone behind many of the new consumer tech innovations.

    POV:
    Future apps development and developers align more with the consumer tech world. Salesforce.com’s acquisition thrusts the cloud vendor into a new world of mobile and social apps.  If successful, Salesforce.com will attract the next generation of developers.
  • Aligns with the database.com acquisition. Heroku’s pricing model is based on dynos, a single web process running code and responding to http requests.  The more dynos used the more concurrency achieved.  As users consume code, they increase database usage through a portfolio of options (see Figure 1.).

    POV:
    database.com can fit neatly into the PaaS stack for Heroku users.  The pricing model could prove complimentary for database.com and other Salesforce.com users.

Figure 1. Heroku Offers A Wide Range Of Database Options

Source: Heroku

The Bottom Line: Salesforce.com Intent On Paving Its Future
Already in the Cloud, Salesforce.com sees its future aligned with mobile and social.  This move provides the significant infrastructure to win the hearts and minds of the next gen apps developer.  Unlike many of its enterprise software competitors, Salesforce.com realizes that the platform is key to its future and success.  If successful, this move will also help Salesforce.com extend its reach into the consumer tech side of applications.  While there are many benefits of PaaS, customers moving to Heroku should seek provisions in The Customer Bill of Rights: SaaS.

Your POV.

Do you think Salesforce.com can transform into a full PaaS?  Have the failures in APEX taught Salesforce.com the lessons learned for success in this new platform?  Please post or send on to rwang0 at gmail dot com or r at softwareinsider dot org and we’ll keep your anonymity.

Related Resources And Links
20101207 PR Newswire – Salesforce.com Signs Definitive Agreement To Buy Heroku

20100429 SoftwareInsider – R “Ray” Wang “News Analysis: Salesforce.com and VMware Up The Ante In The Cloud Wars With VMforce”

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