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Friday, June 12, 2009

Infor buying SoftBrands, owner of Fourth Shift

Looks like the vendor consolidation trend in ERP is not yet over. Infor announced this morning that it is buying SoftBrands, for $80 million. Softbrands adds two new products to the 50+ ERP systems in Infor's wide-reaching portfolio of enterprise software.

SoftBrands may not be a well-known name, but one of the two products in its portfolio is better know: Fourth Shift, a Tier III ERP system that has been around for some time and has a fairly extensive installed base among small and mid-size manufacturing firms.

What's most interesting about this deal at first glance is that Fourth Shift has had a partnership relationship with SAP since 2004 to offer Fourth Shift as a small plant solution to SAP Business One customers. Business One is SAP's small company ERP system, which does not have extensive manufacturing system functionality of its own.

Whether SAP is going to be willing to extend this relationship with Infor going forward remains to be seen. SAP views Infor's installed base as a target for its own sales efforts, so a continued partner relationship with Fourth Shift may be awkward. Loss of the SAP relationship would no doubt be a significant loss to Fourth Shift, but Infor surely must have considered this risk already.

SoftBrands' other products are systems for the hospitality industry, which it picked up in 2006 with its acquisition of Hotel Information Systems (HIS).

Details on the deal are in Infor's press release.

Update: Ray Wang has additional insights and goes into more detail on the hospitality side. He also doesn't think SAP will continue the relationship for Fourth Shift. However, that wouldn't stop Infor from continuing to try to sell into the SAP installed base.

Update, Jun 15. Jason Carter, in a series of Twitter direct messages to me, raises some interesting question: why didn't SAP buy SoftBrands? It would seem an obvious way for SAP to build out its functionality for Business One. If SAP wasn't in the bidding, what does that say about SAP's commitment to Business One? If SAP was in the bidding, why did Softbrands go with Infor?

Related posts
SAP plugs hole in Business One

by Frank Scavo, 6/12/2009 06:25:00 AM | permalink | e-mail this!

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 Reader Comments:

LOL. You're way under with '50 products' Frank - Infor has well over 100 products, including more than 50 accounting systems. So this is just what they need - another ERP system!
 
Dave, you are correct, of course. Thank you.

I meant to say 50+ "ERP systems." I once counted the number, and I believe I am correct. I have updated that sentence to clarify.
 
Has anyone out there who has been acquired by Infor previously have any insight into how they deal with internal IT intergration? From a network and staff position?
 
Interesting point on SAP not buying Softbrands. Very strange.
 
SAP had a number of partners in the manufacturing space for B1. SBN was one of them and by no means the most important though the folks in SBN liked to believe they were. In the race to acquire 100,000 customers by 2010 SAP found SBN irrelevant....
 
To the previous commenter, I would love if you could indicate who the other important partners of SAP are apart from SoftBrands. If you could indicate the approximate percentage of use for each within SAP's manufacturing space for Business One, that would be good also. I'm not questioning the validity of what you are saying--I'd just like to have some more details. Thanks in advance.
 
I don't think it's strange that SAP didn't buy them.

FourthShift Edition (FSE) was only a small part of Softbrands overall business. The rest of their business had very little synergy with SAP and SAP definitely not an acquisition happy company (unlike Oracle or Infor).

I am surprised they didn't make an offer for just that product or code that conflicts. I'm guessing it either wasn't tightly enough integrated, didn't have the ability to be easily made part of their upcoming 'single release for all localizations' approach or that the asking price was too high.

My guess is Infor placate the end users, then go after them with some kind of 'upgrade' program to get them to move to a different Infor Solution
 
Frank, N'ware Technologies is an additional partner of SAP with a manufacturing and distribution add-on to SAP Business One
 
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