Enterprise-Apps Market Squeeze - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Software // Enterprise Applications
News
6/13/2003
02:13 PM
50%
50%

Enterprise-Apps Market Squeeze

It's becoming a buy or be-bought market, giving rise to speculation on how it will all shake out

Manugistics' year-end results also were weak. It had a net loss of $212.2 million on revenue of $272.4 million for the fiscal year ended Feb. 28, compared with a net loss of $115.2 million on revenue of $319.9 million for the previous fiscal year.

Of the two, i2 is a less likely candidate for acquisition than Manugistics, says ARC Advisory's Moore, because it's saddled with too many issues and too much debt. Even then, he thinks the only vendor that might be interested in Manugistics is SSA GT and Baan. Together, SSA GT and Baan will become one of the largest ERP vendors in the manufacturing sector, and Manugistics counts among its clients Boeing, Caterpillar, Cisco Systems, DaimlerChrysler, Ford, Harley-Davidson, and Unilever.

Though executives at SSA GT and Baan will not specifically name companies they'd like to buy, one thing is clear: They will buy something. "We've got $13 billion behind us so we can acquire," says SSA GT CEO Mike Greenough, referring to the investment group of Cerberus Capital Management and General Atlantic Partners that will own the combined SSA GT and Baan.

Baan president Laurens van der Tang says the company will likely acquire more companies focused in the manufacturing space to boost market share. "Any companies in this sort of category are logical targets," he says.

One ERP company that's considered to be an acquisition target is QAD Inc., which sells to midsize manufacturers. As sales to big customers slow, the midmarket space is increasingly seen as an area for fresh growth, so companies with expertise in that market look particularly attractive.

But AMR's Shepherd says QAD tends to shy away from merger-and-acquisition activity and may be even less interested since its most recent quarter looked good. For the fiscal 2004 first quarter ended April 30, QAD's revenue increased 27% to $56.3 million, up from $44.3 million the same time a year ago. License revenue rose 45% to $17.3 million, and maintenance and services revenue increased by about 20%.

ERP vendor Lawson Software Inc. has strong relationships with mid-market health-care, retail, and professional-services firms. But since those markets are well covered by the ERP leaders, Lawson isn't quite as appealing to those companies. Lawson also is struggling financially. For its third quarter ended February 2003, it reported revenue of $78.4 million, compared with $118.8 million the same time a year ago. License revenue took a huge cut, down to $14.2 million, compared with $49.1 million a year ago.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Previous
2 of 4
Next
Comment  | 
Print  | 
More Insights
News
Think Like a Chief Innovation Officer and Get Work Done
Joao-Pierre S. Ruth, Senior Writer,  10/13/2020
Slideshows
10 Trends Accelerating Edge Computing
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/8/2020
News
Northwestern Mutual CIO: Riding Out the Pandemic
Jessica Davis, Senior Editor, Enterprise Apps,  10/7/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
[Special Report] Edge Computing: An IT Platform for the New Enterprise
Edge computing is poised to make a major splash within the next generation of corporate IT architectures. Here's what you need to know!
Slideshows
Flash Poll