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The not-quite-merger between IFS AB and Acumatica Inc. could result in a coalition that challenges top tier ERP vendors.
The two ERP vendors became corporate siblings in June when IFS's owner, EQT Partners, acquired Acumatica. IFS board chairman Jonas Persson is expected to be chairman of both companies, but they will operate independently, according to Darren Roos, IFS CEO. Roos will serve on the Acumatica board.
IFS and Acumatica both sell manufacturing ERP products, but they serve different markets, which will lead to collaboration opportunities, according to Roos. The companies will not compete for the same customers.
"There are loads of areas where IFS can bring value to Acumatica customers, and vice versa," Roos said. "It's a case of trying to sustain the growth in each of the businesses separately, while leveraging those opportunities to help each other."
Based in Linkoping, Sweden, IFS targets large enterprises, with customers primarily in the aerospace and defense, energy and utilities, manufacturing, construction and services industries. Acumatica, based in Seattle, is a cloud-first ERP that targets mid-market companies. IFS is strongest in Europe and has a growing presence in North America, according to Roos.
Although Acumatica is about ten times smaller than IFS, each company can take advantage of the other's strengths to grow and improve their products, according to Jon Roskill, Acumatica CEO. On the business side, IFS uses a direct sales approach while Acumatica sells through a value-added reseller channel network, Roskill explained. Acumatica can use IFS's direct salesforce to expand into Europe, and IFS can use the Acumatica channel to grow its North American presence.
"In technology [Acumatica is] strong in cloud and cloud interfaces, and IFS is accelerating in that direction, so that's a place where they can leverage some of Acumatica's skills," Roskill said. "IFS has a robust set of technologies in manufacturing and field service that are localized to many countries, so we think we can take some of that technology back to Acumatica."
Sharing is good
Sharing resources makes sense for both companies, and the two companies are not likely to step on each other's toes competitively, according to Cindy Jutras, president of Mint Jutras, an ERP analysis firm based in Windham, N.H.
"This is more about Acumatica than IFS. I don't see a lot of overlap in target markets, but I think there will be some synergies here," Jutras said. "IFS already has a strong solution in their target market -- asset-intensive industries -- which is not overly broad."
Acumatica's cloud-first origins should help IFS broaden its cloud deployment efforts, an area where it was relatively weak compared to some competitors, Jutras explained.
"As a cloud pioneer, Acumatica has developed a strong, scalable business model, while IFS lags behind many of its competitors in moving from [on-premises] solutions to delivering software as a service," Jutras said in an analysis she wrote. "In this sense, IFS stands to gain more from Acumatica."
Acumatica adds Phocas BI
Acumatica has added functionality through partnerships with independent software vendors (ISVs), and according to Roskill, there are more than 150 ISVs that have built integrations into Acumatica's ERP platform. These include DocuSign for digital contract management and Smartsheet for collaborative workflow management, as well as Microsoft Power BI and Tableau for business intelligence (BI).
Acumatica recently added more BI capabilities via a partnership with Phocas Software, a cloud-based BI application designed specifically for manufacturing.
Roskill described the Phocas partnership as a good fit for Acumatica because the two companies are aimed at a similar mid-market manufacturing base. Acumatica already has partnerships with some of the larger, more well-known BI platforms including Microsoft Power BI and Tableau, but Roskill said Phocas' ease of use is an important factor for mid-market companies that may not be able to afford data analysts.
"You can do almost anything with Tableau, but you've got to put a lot of emphasis into your expertise," he said. "The difference with Phocas is that it gets very specific manufacturing and distribution oriented analytics and lets you tune that out of the box."
The goal of Phocas' BI software is to take industry-specific data from ERP systems like Acumatica and "make it consumable for business professionals so they can make better data-driven decisions," according to Jay Deubler, president of Phocas' U.S. division.
"We've aligned ourselves with Acumatica, which is an ERP provider, for what we would call our perfect prospect profile in the mid-market business," Deubler said. "Because we now have a pre-written integration, the implementation becomes much easier and less expensive for customers."