News Analysis: MultiPlus Solutions Acquisition Expands IFS' Investment In Project Based Solutions

On August 13th, Swedish-based ERP vendor, IFS (OMX STO: IFS), announced its intention to purchase MultiPlus Solutions AS from Qurius International Holding B.V.  IFS, a $383M vendor (2008 revenues), paid an undisclosed sum for the NOK 45.9M or $7.48M (1 NOK = 0.162878 USD

) Norwegian-based project based solutions (PBS) vendor.  Despite the small deal size, the acquisition provides IFS with multiplicative benefits such as:

  • Strengthened presence in key PBS verticals. MultiPlus Solutions delivers PBS for focused industry verticals such as EPC (i.e. Engineering, Procurement, and Construction), marine industries (i.e. shipbuilding, offshore), and project manufacturing industries.  MultiPlus' industries complement IFS' seven main industries that include aerospace & defense, utilities & telecom, manufacturing, process industries, automotive, retail & wholesale distribution, and construction contracting & service management.

    POV: IFS gains a significant project based marine ERP solution. In addition to supporting project based operations, the solution also delivers sales support, project management, finance, HR and payroll, logistics, production, and service and maintenance.  Strong capabilities in ship building project management and marine service and maintenance will raise IFS' capabilities when in competition with other marine focused players such as Logimatic's MARS and Infor's Syteline. Expect IFS to gain mind share among industries such as oil and gas construction, ship yard development, and design and engineering firms.
  • Complementary customer base. IFS operates in more than 50 countries and serves over 2,000 customers.  The acquisition adds 100 customers in Norway, Denmark, France, the United States, and China focused on project based  solutions.

    Because both vendors have designed their solutions to be database and platform independent, customers can take advantage of product synergies.  IFS customers may seek to adopt MultiPlus' Drawing and Document Management solution while MultiPlus customers may want to include IFS' Value Chain Collaboration, Quality Management, and Maintenance, Repair, and Overhaul (MRO) solutions.  MultiPlus can run on Oracle, Informix, Microsoft SQL Server, Microsoft .NET, and various Unix and Linux platforms.  More importantly, customers and the two companies share a similar cultural fit.
  • Momentum towards growth goals. IFS ranks 15th by revenue in the Software Insider IndexTM(SII) among enterprise apps vendors.  CEO, Alistair Sorbie, publicly states his intention to double product revenue by 2013.

    Expect acquisitions and continued focus on project based solutions to drive growth.  Success for vendors such as IFS will require growth to $500M in revenue in the next 3 to 5 years.  Building economies of scale will allow IFS to continue its investment in deep micro vertical functionality and expand into more areas of project based solutions.

Recommended course of action - stay the course.

In general, the acquisition bodes well for MultiPlus and IFS customers.  Consequently customers should seek clarifications on issues such as:

  • Timing of code base merge. There have been no formal plans announced to integrate platforms.  Customers should continue to seek guidance on timing.
  • Continued support and future migration. IFS plans to continue its investment but may provide future migration paths.  Customers should seek guidance on how to minimize migration issues in their existing environments
  • Access to MultiPlus functionality. Existing IFS customers who seek to add MultiPlus features may want to seek clarification on whether or not it makes sense to begin deployment today or await future announcements.

The bottom line - PBS space continues to consolidate
Recent acquisitions of QuickArrow by NetSuite OpenAir and growing interest among vendors for solutions that focus more on services industries will increase merger and acquisition activities in the space.  As the developed world shifts from a product based economy to a services based economy, PBS plays a key role in solving the technology needs for a project centric world.  End users can expect more stability as larger vendors acquire PBS specialists for industry specific expertise and key capabilities in project accounting, resource planning, project management, and compliance.
Your POV.
Are you an IFS or MultiPlus customer?  How do you feel about the merger?  Do you feel that IFS will be a good steward?  Were you concerned about MultiPlus' viability?  Please post your comments here or send me a private email to rwang0 at gmail dot com or r at softwareinsider dot org.
Copyright © 2009 R Wang. All rights reserved.