Event Summary
On December
15, MAPICS, Inc. a provider of enterprise business applications for mid-sized
manufacturing companies, announced a definitive agreement to acquire Pivotpoint,
Inc., a company whose technology and e-business solutions cius on the extended
enterprise application space. With this aggressive move, MAPICS immediately
expands its offerings across multiple platforms, including Windows NT, UNIX,
Linux and AS/400. In return, Pivotpoint gains access to MAPICS' worldwide network
of affiliate sales organizations, long recognized as one of the best in the
industry.
"An important advantage of this partnership is that it positions us as the e-business
leader in our combined markets," said Dick Cook, MAPICS' president and chief
executive officer. "Pivotpoint applications are unmatched in their ability to
utilize the latest Internet technologies. Combined with MAPICS' advanced e-business
framework, our customers will derive significant business value from current
and future Web capabilities. We will also leverage a unique combination of applications
for the extended enterprise that allow our customers to build tighter relationships
throughout their supply chains," said Cook.
As
part of this business combination, Steve Haley, Pivotpoint's president and chief
executive officer, will assume the new position of chief operating officer of
MAPICS. Haley will have worldwide responsibility for product development, marketing,
sales and customer service. Plans call for products from both organizations
to be sold and implemented by the MAPICS affiliate network. Pivotpoint's experienced
direct sales and service professionals will team with MAPICS' affiliates and
its Major Accounts organization that works with large, multi-site and multi-national
customers.
Through
this combination, MAPICS expands its foothold in the growing market for integrated
manufacturing solutions beyond the AS/400, to include Windows NT, UNIX and Linux.
"MAPICS has become one of just a handful of enterprise software providers to
offer fully integrated solutions on all of the industry's leading platforms,"
said Doug Bulla of Guide Technologies, a MAPICS affiliate in Cincinnati, Ohio.
Market
Impact
We expect a synergistic combination of these two compatible corporate cultures
that have strong ERP products and e-business strategies, one in which each can
leverage the others' sales channels and complementary vertical markets. We believe
this was one of the best strategic moves that MAPICS could have made given its
current state of affairs. With this move MAPICS is in a position to resolve
the burning issues pointed out in our November 3, 1999 news analysis (See TEC
News Analysis article: "MAPICS
Reports Solid Profitability Despite Dismal Fiscal 1999 4% Growth" November
3rd, 1999). These issues were 1) confinement of its maturing product to the
AS/400 platform, and 2) a dismal organic growth in fiscal 1999. This merger
creates a company with combined revenue of $160M and a product portfolio that
can run on all major hardware platforms, thereby leapfrogging most of its competitors
in the mid-range ERP market.
User
Recommendations
This event does not significantly change our view (See TEC Technology Research
Note: "MAPICS:
Will Customer Satisfaction be Enough?" October 1st, 1999) that MAPICS should
be included on the selection list for mid-market companies (with $50M-$500M
in revenue), where discrete and batch manufacturing and logistics modules are
the main pillars of an enterprise application. MAPICS is a renowned mid-market
ERP vendor, with a long tradition and a large, loyal and satisfied customer
base. However, since we expect growing pains in merging disparate product lines
within the current affiliate channel, potential clients should conduct a preliminary
research on industry expertise and reference sites of a regional MAPICS affiliate
service provider when the MAPICS/PivotPoint product is selected.