SSA is aiming to become one of the world’s largest enterprise application vendors.
The addition of Baan will turn SSA into the fourth largest ERP vendor with almost $600 million in revenue. The merger of Baan with SSA was expected, but SSA’s openness about ambitions to play a leading role in consolidation of the software sector is new.
Coming a day after the announcement that PeopleSoft is to take over JD Edwards, Baan president Laurens van der Tang said that further consolidation of the sector is inevitable, and the merged group wants to play a leadership role in that consolidation and be among the top three within two years.
Mr Van der Tang indicated that there is a roadmap in place for further acquisitions. While there is no doubt that SSA has the financial muscle to scoop up many of the struggling companies in the market, a huge question mark will hang over its as yet unproven ability to turn them around. Certainly, its ambition to replace either SAP, Oracle or PeopleSoft/JD Edwards as one of the top three vendors appears ludicrous in the absence of any details about its strategy.
Baan is a case in point. Mr Van der Tang pointed to substantial complementary factors in the two organizations, which he insisted would be profitable from day one. SSA has a strong North American customer base while Baan’s strength is in Europe. SSA’s customer base tends to be in process manufacturing sector and Baan is favored by discrete manufacturing.
Yet van der Tang said that SSA could capitalize on Baan’s technological strength and sell its applications to a larger customer base. SSA has based its expansion on a flurry of acquisitions of smaller ERP vendors and is not known for its technological prowess. Though Baan undoubtedly placed greater emphasis on R&D than SSA, and has great hopes for the launch of its Gemini enterprise backbone later this year, the company’s technological focus has had little impact where it counts – on the company’s figures.
