Solutions, headquartered in Newton, MA, is a global provider of enterprise resource
planning (ERP) and enterprise asset management (EAM) software exclusively for
process manufacturing enterprises and large corporate divisions. Marcam Solutions
was created after the 1997 breakup of Marcam Corporation, a company founded
in 1980 that was struggling to manage the business of two product lines that
targeted the two completely different markets of discrete and process manufacturing.
The dissolution of Marcam Corporation created two new ERP software companies,
Marcam Solutions and MAPICS Inc. Marcam revenues in fiscal 1998 were $124.5
million. Paul Margolis and John Campbell founded Marcam (a name derived from
their surnames) in 1980 to provide MAPICS installation and customization services.
In 1983 Marcam began developing its own planning and control software for process
manufacturing companies such as food, chemicals, and pharmaceuticals. The result
was PRISM, first licensed in 1987. Marcam went public in 1990 and acquired ShawWare
(maintenance management applications) in 1991 and the MAPICS product line from
IBM in 1993. Marcam launched Protean ERP software in 1994. In 1995, it formed
subsidiary Foresight Software to develop customer interaction applications,
and it halted development of a client/server version of PRISM to focus on its
similar Protean line. Today, Marcam Solutions offers three product suites for
process manufacturers: an AS/400 based ERP package called PRISM, an open platform
ERP product called Protean, and an EAM product called Avantis, initially released
in 1981 by ShawWare. The PRISM and Protean software suites automate tasks such
as resource planning, production model development, and quality control management.
Avantis software manages inventories, maintenance schedules, and all related
sells its product primarily through its direct sales force in 19 offices worldwide.
The Company also partners with a number of industry-leading vendors including
HP, NEC, IBM, and PeopleSoft. By fiscal year end 1998, the Company had approximately
1,400 customer sites in over 40 countries. In 1999, Marcam Solutions was acquired
by Wonderware, the factory automation division of Invensys Plc., a global electronics
and engineering company with headquarters in London, UK.
believe that PRISM, Protean, and Avantis are leading core ERP products for
the Small-to-Medium Enterprises (SME) market segment, particularly due to
their deep respective niche functionality (process manufacturing and asset
management), low total cost of ownership (TCO), and speed of implementation.
was one of the first mid-market ERP vendors to incorporate concepts of component
technology, Internet and e-Commerce, and integration with other vendors'
components, all providing for flexibility and ongoing post-implementation
system agility. Furthermore, the Marcam product suite can run on the most
popular platforms and databases.
PRISM and Protean have long exhibited certain plant-level features (e.g.
the ability to track the status of product throughout the production process,
and finite scheduling) in addition to performing a standard range of ERP
business functions. Moreover, the envisioned integration with Wonderware's
FactorySuite 2000 will allow Protean users to solve shop floor problems
with all production data collected and made instantly available.
has struggled financially for over four years, (see Fig. 1 - Marcam Solutions
Inc. - Annual Results Chart) and the trend of decreased revenues and loss
reporting continued throughout 1999 (see Fig. 2 - Marcam Solutions Inc.
- Quarterly Results Charts), leading to the Company's acquisition for the
price less than a half of its annual revenue ($60 million).
is confined to the process manufacturing market and does not support discrete
manufacturing. In addition to this, PRISM and Protean lacked financial and
distribution functionality until late 1998, which forced the Company to
seek product interfacing partnerships. This has resulted in a number of
lost opportunities, since certain customers have opted for more complete
solutions from a single vendor. Moreover, the Marcam product suite still
lacks a strong CRM, SCM, and HR product offering.
the merger with Wonderware brings the positive prospects referenced above,
we believe Marcam's future as an ERP vendor is uncertain due to its future
need to blend a variety of different core competencies, and its possible
shift of focus towards plant integration applications. We expect the situation
will become further aggravated with product integration issues.
believe that within the next 4 years Marcam will gradually shift its focus
to plant integration and operations applications, while de-emphasizing its
financial and order management components and relying on interfaces with
ERP vendors with strong core competencies in these areas, like PeopleSoft,
SAP, Lawson, and Great Plains (60% probability).
its inception, Marcam has focused solely on process manufacturing expertise,
and existing Marcam resources and corporate culture do not make diversification
a viable option at this stage. Therefore, we recommend the following:
the most appropriate partnerships for its current enterprise application
gaps (Front-Office, Supply Chain, Business Intelligence), and leverage those
partnerships to create sustained service revenue and regain the Company's
Explore other joint research and investment opportunities in order to both
financially strengthen the Company and expand its distribution channel.
A good example is the arrangement Marcam has made with NEC to jointly develop
Marcam Financials, while NEC remains one of Marcam's strongest partners
in the Asia-Pacific market.
further ongoing cost scrutiny and identify opportunities for further cost
reduction. Marcam's sales & marketing count remains one of the highest in
the industry, measured as a percentage of a total number of employees, while
the sales revenue per sales and marketing employee of $445,000 is one of
the lowest (See Fig. 3).
generally recommend including Marcam in a short list of an enterprise application
selection to mid-market and low end tier 1 companies (with $50M-$1B in revenue),
based on its long presence and proven expertise within the Chemical, Food,
and Pharmaceutical industries.