SSA GT makes yet another shrewd acquisition

Strengthening ERP software vendor SSA Global Technologies, which already includes Max International and the interBiz parts of what was Computer Associates’ manufacturing and distribution applications business, is now to acquire web-based enterprise software and services provider Infinium Software. Although not well known in the UK, the firm has some 1,800 customers, many in the US and spanning the process industries, gaming, healthcare, transportation, retail, financial services and distribution. It specialises in HR, payroll, financial management, CRM (customer relationship management) and materials management as well as core manufacturing and business performance analysis software. It’s also an IBM eServer iSeries (AS/400) house, and in this sense it’s a good fit for SSA, which remains 70% on AS/400: integration shouldn’t be that big an issue. This is a shrewd move for SSA. Although not entirely manufacturing-centric, it strengthens the company by adding diversity in terms of market (rather like PeopleSoft), while also adding functionality and customer base – so important for software vendors today. When the inevitable rationalisation is done, there should be good potential for SSA to gain even more of a foothold in the process, food and beverage and so forth sectors, selling its existing suites, including the interBiz PRMS warehouse management and BPCS role-based portal developments, to Infinium customers. Likewise, it can expect to sell its own customers Infinium software e-business and financials add-ons. Graeme Cooksley, executive vice president, points out that manufacturing users no longer change their ERP systems every five years. “They keep them for 15—20 years, so the growth is in the extension products and the customer base.” He also alludes to the importance, when it comes to ERP extensions, of supply chain and lean manufacturing initiatives and the IT to support them, and hints that we can expect developments here for SSA. “No one said we’d finished with our acquisitions,” he says. As for rationalisation of the existing product ranges, new development for Max seems to be continuing, while the likes of PRMS and BPCS, which Cooksley agrees are extremely similar anyway, are likely to merge in due course, although still with support for existing users. SSA absolutely understands the importance of happy customers. As for Masterpiece, also primarily on AS/400, he insists that there is still slow growth in uptake of the system, not least because of new development work already underway when it was in the CA stable. “We’ve released new versions of Masterpiece and PRMS by bringing together that work using our own development and deployment practices.” It’s an astonishing picture, given SSA’s chequered history, but this is a company that – assuming the venture capital funding ethos holds out and profitability continues to grow – seems to be going places faster than some give it credit. SSA recently reported healthy year end results (to July 31, 2002) with total revenues of $187 million, up 39% on the previous-year, and with earnings before interest, taxes, etc of $35 million. Software license fees contributed 32% with the remaining 68% coming from maintenance and services. Europe, Middle East and Africa (EMEA) were responsible for 33% of revenues, and this can only grow with the Max and CA interests. The deal with Infinium is expected to close before January 1, 2003.