Consolidation in the enterprise application space appears to be picking up a full head of steam as SSA Global Technologies has announced that it will acquire Baan, a 25-year-old ERP company.
It was only last week that Business Objects announced its intention to acquire Crystal Decisions, while PeopleSoft acquired J.D. Edwards & Co. even as its dug its own heels in to stop Oracle's takeover assault.
SSA Global Technologies, based in Chicago, targets manufacturing, services, and public sector with a range of ERP applications and CRM, supply chain management, and business performance software.
SSA chairman and CEO, Michael Greenough, said that SSA would be able to extend its strength in audit to cash cycle with Baan's strengths in ERP extensions such as supply chain, advanced planning, and CRM.
Baan, a wholly-owned division of Dutch company Invensys, offers similar software and services to discrete manufacturers in the industrial machinery, electronics, automotive, and aerospace sectors.
"It gives SSA a well-respected solution in the discrete industry and good channels to market in Europe where SSA has not been as strong," said John Moore, vice-president and general manager of enterprise services at ARC Advisory Group in Boston.
While SSA claims about 10,000 licensees, Baan has about 6500 with combined license revenues of about $US160 million.
Moore said SSA had been on an acquisition spree in which it picked up InterBiz from Computer Associates and Infinium, a process ERP solution.
"A lot of the solutions they have been buying are based on the IBM AS/400 stack, a mid-tier play, but Baan gives them a technology stack in the Microsoft environment," he said.
Greenough said that Baan solutions run on both a Microsoft stack, meaning on top of SQL Server, and IBM's iSeries, the three-year-old replacement to the AS/400.
"If you want to be the largest player in the mid-market you have to have both," Greenough said.
SSA is the largest player in the mid-market and the company has no fear of such larger enterprise software vendors as Siebel Systems or Manugistics Group. The technology infrastructure upon which these rival companies have built their pricing model cannot be supported in the long term, said Greenough.
"Technology is a commodity that destroys the Siebel concept of one giant solution," Greenough said. "We are the Wal-Mart of the software industry."
SSA appointed Graeme Cooksley president of Baan. Cooksley will also maintain his current responsibilities as executive vice-president of SSA.