Early in August, Agile Software Corporation (NASDAQ: AGIL), a San Jose, CA-based provider of PLM solutions with historic strength in the electronics and medical devices industries, announced it had entered into a definitive agreement to acquire, Eigner (www.eigner.com ), a German provider of PLM solutions to the automotive, industrial equipment, aerospace and defense (A&D) industries, for an undisclosed consideration comprised of stock and cash. Agile and Eigner expect to complete the acquisition as quickly as possible.
in August, Agile Software Corporation (NASDAQ: AGIL), a San
Jose, CA-based provider of PLM solutions with historic strength in the electronics
and medical devices industries, announced it has entered into a definitive agreement
to acquire, Eigner (www.eigner.com),
a German provider of PLM solutions to the automotive, industrial equipment,
aerospace and defense (A&D) industries, for an undisclosed consideration comprised
of stock and cash. Agile and Eigner expect to complete the acquisition as quickly
recent Agile announcements include:
Quarterly financial results
Acquisition of certain customer assets and the intellectual property of privately-held
MS2, Inc., a provider of the product portfolio management
solution, MS2 Accelerate
Completion of the acquisition of ProductFactory, Inc., another
product portfolio management company
Completion of the acquisition of oneREV, Inc. of Cupertino,
CA, which added important enabling technology that should benefit Agile's
customers by speeding the exchange of information between Agile systems and
external information sources
Launch of Agile MD, a PLM solution designed specifically
for the medical device industry in their aim of accelerating time to market,
reducing operating and direct material costs, and ensuring regulatory compliance
General availability of Agile Product Cost Management 8.5.
is Part Three of a three-part note.
One detailed recent announcements.
Two discussed the Market Impact.
In addition to the products' rationalization, the integration at sales and cultural levels will be challenging. Also, neither company excels in marketing, while cultural dissimilarity and power clashes between two strong matrimony partners have often flawed software mergers. Still, although Agile's flamboyant Silicon Valley supply chain collaboration culture will clash with Eigner's German engineering ethos, these differences should not threaten the merger since the companies have common business goals, complementary strengths, and both have demonstrated an ability to solve real problems.
At the same time that Agile is integrating Eigner into its business, Agile does not appear to have completed its acquisition strategy. Agile will likely acquire additional products to expand its product footprint and gain access to new industry verticals. Absorbing the current and future acquisitions will require strong vision, leadership, and execution or result in a company with a suite of uncomplimentary business and products.
Most likely their foes will try to position themselves as providers of full-function, pre-integrated applications to manage product life cycles in conjunction with customer life cycles and enterprise operations. Even if Agile continues to deliver superior products and provide a full suite of PLM products, its competition against single-vendor ERP suite products will increase Agile's selling cycle and associated costs. In order to combat pressure from ERP vendors, Agile will need to continue to invest in leading functionality for improving profitability across the product lifecycle. To further differentiate and grow, Agile will need to continue gaining depth in its expertise and solutions for specific vertical markets.
In addition to ERP vendors, Agile will continue to face competition from other pure-play PLM vendors. Agile will need to continue to execute in a highly competitive environment, ensuring implementation success for their customers and sales success for themselves. Moreover, in order to forestall users' potential concerns over its long-term viability, Agile must soon demonstrate sustained profitability without trying to justify its protracted dismal performance through the economic slump. Although Agile has a strong cash position, long-term viability will come from profitable operations.
In general, existing customers of the merging PLM vendors should be attentive, but should still look at these events as positive, and continue business as usual since there should not be much disruption to either company's operations. Customers should proactively participate in action groups that should influence the converging platform in the future. Although Agile has produced a detailed blueprint, users should keep asking the following questions when evaluating the combined Agile-Eigner offering:
Are there any price advantages offered to existing clients who elect to purchase
or migrate to the future integrated products?
What technology will be used to integrate the applications?
How will Agile execute in migrating the acquired applications onto a common
platform and user interface?
Will conversion and migration programs and technology be developed?
Discrete manufacturers seeking to facilitate manufacturing coordination across a supply chain, and which have new product development concerns, including part simplification and reuse, design collaboration, and project management for cost containment should keep Agile as the primary choice on their short lists. Especially for those manufacturers with complex mechanical engineering requirements and an electronics-based supply chain (e.g., telecommunications equipment, imaging systems, and security equipment, combine printed circuit board manufacturing economics with the customer-specific engineering of hardware and software, plus after-sale services and spare parts revenue stream), a combination which might offer much to consider. However, they should watch developments carefully. The competitive landscape will heat up, and manufacturers will see more choices, particularly those looking for a full suite of functions to manage product life cycles.
a more complete discussion of how to select a PLM vendor, go to Selecting
A PLM Vendor. (posted October 17, 2003)
About the Authors
Jakovljevic is a research director with Technology Evaluation Centers,
Inc. (TEC), with a focus on the enterprise applications market. He has over
fifteen years of manufacturing industry experience, including several years
as a power user of IT/ERP, as well as being a consultant/implementer and market
analyst. He holds a bachelor's degree in mechanical engineering from the University
of Belgrade, Yugoslavia, and he has also been certified in production and inventory
management (CPIM) and in integrated resources management (CIRM) by APICS.
Brown has over fifteen years of experience in management consulting
and application software focused on the manufacturing industries. Jim
is a recognized expert in software solutions for manufacturing and has broad
experience in applying enterprise applications such as Product Lifecycle Management,
Supply Chain Management, ERP and CRM to improve business performance. Jim
is a frequent author and speaker on applying software technology to achieve
tangible business benefits. Jim can be reached at firstname.lastname@example.org