The Name and Ownership Change Roulette Wheel for Marcam Stops at SSA Global Part One: Event Summary




Event Summary

SSA Global, a Chicago, IL-based extended enterprise solutions and services provider for process manufacturing, discrete manufacturing, consumer, services, and public companies worldwide, which has for the last few years become an insatiable enterprise applications market consolidator, seems to have many more aces up its sleeve. Namely, the vendor, which was once an object case of a poorly managed enterprise resource planning (ERP) company during the late 1990s (see Another One Bites the Dust—SSA Gored to Death), has, in a comeback fashion, since late 2001 experienced a dozen or so of consecutive quarters of growth and profitability that is possibly unique in the industry today. The company has done it while concurrently orchestrating several successful acquisitions including former EXE Technologies, Inc. (see SSA GT to EXE-cute (Yet) Another Acquisition), Baan, Elevon, and Ironside Technologies (see Baan And SSA GT Merge To Form a Mid-Market Empire With An ''Iron Side''), Infinium Software (see Is SSA GT Betting Infini(um)tely On Acquisitions?), interBiz, the former e-Business division of Computer Associates (see CA Unloads interBiz Collection Into SSA GT's Sanctuary), and ICL Max International (see SSA Acquires MAX Hoping To Leap From Its MIN). As a result, the vendor now has 121 locations worldwide and its product offerings are used by more than 13,000 customers, some of which represent market-leading companies, in over 90 countries.

Based on SSA Global's temporary acquisition hiatus of several months following the EXE acquisition in the second half of 2003, some might have prematurely concluded that the vendor's focus is now on the digestion of this spate of additions to the family. Indeed, prior to its most renewed acquisitions' streak in 2004, SSA Global had done notable work in making sense out of its slew of earlier acquisitions, which analysis will be the topic of another forthcoming article. However, with its recent acquisition of Arzoon (see SSA Global Forms a Strategic Unit with an Extended-ERP Savvy), the vendor has gotten back on the acquisition trail.

Most recently, at the beginning of July, SSA Global announced it has acquired Marcam, a provider of specialized, operational-level ERP solutions for process manufacturers, from Invensys plc, the global automation and controls group with headquarters in the UK, from which SSA Global also bought Baan about a year ago. However, while the price tag for Baan was known at the time—~$135 million (USD)—, financial terms of the Marcam agreement were not disclosed. SSA Global believes that Marcam's proven process manufacturing solutions further strengthen its expertise in the food and beverage, pharmaceutical, and chemical industries, which it has had within some of its products like BPCS (its own original product), PRMS (coming from former interBiz and originally from Pansophic), and Infinium, all of which are to be rolled into the upcoming next-generation SSA LX product line. The combination of Marcam, whose enterprise solutions streamline plant- and process-oriented supply chain operations, and SSA Global will supposedly deliver process manufacturing customers greater operational visibility and the ability to optimize financial operations, inventory management, order management, purchasing, and additional critical business processes.

On the other hand, Marcam customers might benefit from the same quality service and support current SSA Global customers are reportedly experiencing through "a customer influenced product roadmap, incremental systems modernization, and continued industry focus". SSA Global believes that its product convergence strategy will provide a way forward for the PRISM and Protean customers, coupled with a commitment to support all existing versions. The vendor pledges to also offer Marcam customers its extended enterprise solutions that can address their immediate critical business challenges.

This is Part One of a six-part note.

Parts Two and Three will discuss the marketing by Invensys.

Part Four will detail what SSA Global gets.

Part Five will cover the merger impact and challenges.

Part Six will discuss competition and make vendor and user recommendations.

Market Impact

A surprise or not, and quite resembling its former sibling Baan (i.e., under Invensys), with which it is now again being reunited but this time under SSA Global, Marcam and its enduringly anxious users must feel a deep sigh of relief and a hope that its long and winding journey, which has been much tainted with protracted viability and ongoing product development issues ever since the late 1990s, is finally reaching its more desired destination. This indeed seems to be possibly the best closure for Marcam in light of Invensys' poor (albeit recently improving) financial state, its muddled strategy with several enterprise and plant automation applications it used to own, and given the new owners' intentions of taking good care of the solid acquired product, which also likely came at a steep discounted price tag, given SSA Global's penchant for obtaining companies at a high acquired market share per paid price ratio.

At least based on the experiences of formerly also disconcerted interBiz or Baan users, Marcam should certainly feel more at home and within a proper family amid the SSA Global's ERP portfolio than as part of Wonderware/Invensys.

What Happened With Invensys

In our note from 2003, we analyzed deeply what had likely gone wrong between Baan and Invensys (see Baan Seeking a New Foster Home—A Dj vu Or Not Quite?). Although Marcam will have meanwhile been given a few more chances by Invensys, many similarities with the Baan failure have continued with Marcam too.

In a nutshell, Invensys, with its ambitious 'Sensor to Boardroom' product strategy, seemed once determined to provide manufacturers a solution that would satisfy all their needs, from shop floor measuring devices and process control to cyberspace supply chain collaboration, since Baan and Marcam would offer enterprise-level applications (in discrete and process manufacturing arenas respectively), whereas Invensys would offer manufacturing executions systems (MES) and plant automation components. MES, as per the Manufacturing Enterprise Systems Association (MESA International) definition, is essentially any system that uses current and accurate data, triggers, and reports on plant activities as events occur. From electronic production management systems to shop-floor data capture, MES functions manage operations from point of order release into manufacturing to point of product delivery into finished goods.

The possibility of integrating and providing all elements of a complete manufacturing solution, at least from a same source if not exactly as a single computing platform, must have been tempting, and was possibly lucrative, but every effort should have been made in order to avoid the kind of poor piled-up products' execution, which partly led to Baan's and Marcam's pre-Invensys demise in the first place. While we in principle approved of Invensys' move to provide manufacturers a solution that may satisfy most of their needs, creating functional connections between front office, ERP and plant automation applications was indisputably warned as a colossal task.

What Invensys did not realize at the time was the fact that while prospective customers could hardly object to a broad and integrated suite, they were unwilling to simply "rip and replace" the systems they already had in place, and which were working well. Hence, the devised Baan-Marcam-Wonderware-etc. manufacturing suite strategy virtually failed and Baan was divested, as mentioned earlier, in June 2003.

Invensys' Continued Efforts with Marcam in 2003

Yet, over a year ago, after a lengthy and painstaking soul-searching exercise and immediately before the Baan sale, Invensys created a new group within its Production Management Division (PMD) called Invensys Production Solutions (IPS) , which included the PRISM and Protean process ERP products plus the resources of Invensys Validation Services group (www.vtc-usa.com), a Montreal, Canada-based provider of regulatory compliance, validation, and consulting services encompassing the entire validation project life cycle and a range of validation services for the regulated supply chain (see Invensys Production Solutions—Can Historic Strengths And The 'Protean Boost' Overcome Its Liabilities?).

While the newly formed unit at the time should have had some strength, since the PRISM and Protean products contain functionality that at least still can challenge the leading products in the process manufacturing arena, it also had many inherited liabilities that had to be addressed, in a great part because existing users of its above solutions have suffered from frequent product strategy changes as a result of vacillations by the Invensys parent company.

Namely, to refresh our memory, in the past several years, Invensys process solutions' customers have experienced the displeasure of witnessing several radical changes of strategy, causing some of them to begin to seriously doubt the vendor will ever deliver their market-specific product capabilities. In July 1999, Invensys bought the outstanding shares of then struggling Marcam Solutions, and folded it initially into its Wonderware factory automation division. Further, in August 2000 Invensys acquired then also languishing Baan Co. (see Baan Yet Another ERP Vendor to Find a Sanctuary Under Invensys' Wing) and made it a part of the former Invensys Software Systems (ISS) division.

The initial strategy for the products, which was announced after the Baan acquisition, was to release a unified Baan product that would combine functionality for discrete and process manufacturing (see Process ERP Market Loses PRISM and Protean). After hearing existing customers' less-than-pleased feedback and after another reconsideration of its past investments, Invensys then modified that strategy to one of creating the Baan Process division (see Invensys Announces New Division—Baan Process), which included five process ERP products coming to Invensys through Marcam and Baan acquisitions: Baan IV Process, Baan Dimensions, PRISM, Protean, and Baan Cable & Wire. The announcement was a departure from rewriting all the products into one core erstwhile iBaan ERP product—the unit was not going to provide an integrated solution any longer, but would rather provide combined applications capabilities via an integration framework.

This concludes Part One of a six-part note.

Parts Two and Three will discuss the marketing by Invensys.

Part Four will detail what SSA Global gets.

Part Five will cover the merger impact and challenges.

Part Six will discuss competition and make vendor and user recommendations.

 
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