Last month, Infor bought SSA Global Technologies, which had itself bought Baan and several other business software vendors a few years ago (SSA also survived Chapter 11 bankruptcy in 2000, but that’s another story).
The acquisition is just one of many that have taken place in the IT industry and it won’t be the last. And while sizeable — it’s worth $US1.4 billion (NZ$2.2 billion) — it’s hardly the biggest to have taken place in recent years; both Oracle’s acquisition of PeopleSoft (US$10 billion) and HP’s purchase of Compaq ($US25 billion) were much larger.
What makes the Infor-SSA deal a bit different is the tangled, interconnected, splice-and-dice nature of the various components and systems that will transfer to Infor.
One of the most interesting aspects of the saga is the role played by Geac.
In November, Geac was acquired by private equity firm Golden Gate Capital (which is also a majority shareholder in Infor). Golden Gate Capital then on-sold Geac’s ERP assets to Infor. Now, Infor is buying SSA, which just happens to be headed by Mike Greenough, who was head of Geac commercial systems, a Geac subsidiary, for eight years in the 1990s.
When Greenough joined SSA in 2001, he hired several ex-Geac executives, including Mark Rosenberg, who joined SSA in 2001 as vice president of IT and global support; Marvyn Turk, who also joined in 2001 and became SSA’s vice president of taxation and business development; Shelley Isenberg, who joined SSA in 2002 as senior vice president of acquisitions and corporate development and Warren Fletcher, another long-time Geac executive who became SSA’s North American regional president under Greenough. According to website ITJungle, in an article written in 2002, “One third of SSA GT’s executive team has come to the company directly from Geac.”
There’s even a local connection here: New Zealander Graeme Riley, who was appointed SSA’s Pacific region manager at the beginning of this year, was also a long-time Geac employee before he joined SSA in 2004.
Is there anything wrong with this? Of course not. New executives often appoint those they have previously worked with, and know and trust.
Another interesting aspect of the Infor buyout of SSA is the long and involved ownership chain involving InterBiz, a set of applications SSA acquired from CA in 2002 and which will now pass into Infor’s hands.
The InterBiz product set included PRMS, an AS/400 mainframe OS-based system that was first developed by a long-forgotten vendor, IR, for the S/34 OS in 1975. Then called just RMS (Resource Management System), it fell into the hands of Professional Computing Resources in 1978. In 1986 Pansophic Systems acquired Professional Computing Resources and rewrote RMS for AS/400, renaming it PRMS (Pansophic Resource Management System). CA bought Pansophic in 1991 and later integrated the PRMS system into its InterBiz set of products, before selling InterBiz to SSA a decade later.
Again, there’s nothing wrong with that — the software industry is known for constant mergers and acquisitions, and any product that’s been around for 30 years is likely to have changed hands a few times. As long as users’ needs are met, changes of ownership are no big deal.
The never-ending purchase and sale process of software companies just goes to show how dynamic and fast-moving the industry is and while the overall trend is towards consolidation, there won’t be the outcome in other industries, such as the car industry, where dozens of providers have merged into a handful.
That’s because small software companies will continue to be started — it’s a low-barrier-to-entry sector — and because software will always be more than just a commodity.