The Most Important Technology Vendor You’ve Probably Never Heard Of
SSA's acquisition of EXE Technologies will enhance its supply chain management and execution functionality, officials say
SSA Global Technologies is well on its way to becoming the most important technology vendor you’ve probably never heard of.
First, in early June, SSAbolstered by more than $14 billion in venture capital backinggobbled up enterprise applications specialist Baan for $135 million, a real bargain (http://info.101com.com/default.asp?id=1655). SSA closed the acquisition last month.
This week, SSA purchased EXE Technologies, a purveyor of supply chain management (SCM) software, in a deal valued at about $45 million. EXE Technologies develops software that drives supply chain execution processes, including warehouse management, fulfillment, collaboration, inventory management, and supply network execution.
SSA officials expect that EXE Technologies products will enhance the supply chain management and execution functionality of SSA’s product portfolio. “Our two companies share many synergies including industry focus and customer profile," said EXE Technologies CEO Joe Cowan in a prepared statement. SSA markets business automation solutions and has enjoyed great success in the manufacturing sector. Over the last four years, the company has fielded a stable of manufacturing-oriented productsincluding business intelligence, customer relationship management, and ERP componentsbuilt largely on the strength of acquisitions and OEM relationships. In December 2001, SSA began acting as an OEM for Applix’ iCRM as a CRM component for its BPCS ERP suite.
Only recently has SSA pursued the growth-through-acquisition strategy that analysts say could make or break the privately held company. Besides Baan and EXE, this year alone SSA has picked up Ironside Technologies Inc. (a business to business electronic commerce specialist) and Elevon Inc. (a provider of e-business and collaborative commerce solutions).
The company's growth strategy is its greatest opportunity and its greatest challenge, according to Kelly Spang Ferguson, a principal CRM analyst with consultancy Current Analysis.
Not surprisingly, Spang Ferguson says that SSA’s ability to integrate technologies from its recent Baan and EXE Technologies acquisitions will largely determine the success of its strategy. If the company’s track record is any indication, she speculates, SSA should be okay.
“Over the past four years, they’ve executed across several different acquisitions. The proof is in the pudding. If you look at their financials, they’re seeing significant revenue growth over the past eight quarters, and that in itself, for a private company, what they’ve disclosed in terms of their revenue is very positive.”
SSA must also gin up brand awareness, Spang Ferguson argues. “At this point, they have a handful of different product brands, and recently they got Baan, which is a well-established brand,” she explains. “At the same time, SSA Global Technologies doesn’t have the brand recognition that a lot of their competitors have. So the irony here is that they could become one of the most important vendors in the manufacturing sector that no one’s ever heard of.”
The upshot is that if SSA can execute and successfully integrate its disparate acquisitions, it will have successfully positioned itself as a player that customers must pay attention to.
“It’s a risky strategy, but they’ve got a good track record in this, although they haven’t attempted an acquisition as big as the Baan one,” Spang Ferguson concludes. “Bringing all of these acquired products together won't be easy. But if they succeed, they will be a force to be reckoned with in not just manufacturing, but automotive and consumer packaged goods verticals.”
Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.