Epicor merging with Scala--hope for Epicor's future?

Epicor announced this week that it is merging with Netherlands-based ERP vendor Scala Business Solutions. Scala had about $70M in revenue last year, compared to Epicor's $143M for the trailing 12 months. The parties expect the merger to be effective in the first quarter of 2004. More details are on the Epicor press release.

Because Scala's installed base is primarily in Europe and the Far East, Scala is not a household name in the US. Scala has had notable success in penetrating the Eastern European, Russian, and Chinese markets. Therefore, Scala gives Epicor its first serious market expansion beyond North America, Australia, and the UK. Scala is particularly strong in multi-currency and multi-language functionality as a fundamental attribute of its development architecture. Scala also gives Epicor presence in a few key industries, such as construction equipment, pharmaceuticals, and food and beverage. From a technology perspective, both Epicor and Scala are Microsoft-centric, with both on record as intending to comply with Microsoft's .NET architecture. Scala has gone so far as to incorporate Microsoft's new CRM offering into its own CRM product.

Nevertheless, it's hard to get excited about this merger or Epicor's prospects in general. Epicor just acquired ROI Systems a couple of months ago, adding another ERP product to its already crowded portfolio built from other acquisitions. Now Scala joins the mix. On the surface Epicor looks like a Tier III equivalent of SSA Global, which has been rolling up Tier II vendors such as Baan and Infinium. But in SSA's case, one senses some serious money at work and a well-articulated plan that includes complementary products and cross-selling across the multiple customer bases. (See my posts on Sep. 25 and Sep. 26). Maybe Epicor has a similar plan. If so, I haven't heard of it. In speaking with SSA clients, one senses hope that SSA's commitment might extend the life of their existing system investment. In contrast, in the past week, two ROI clients have indicated to me that they are nervous about ROI's future under Epicor.

Am I missing something here? If anyone can sound a positive note on Epicor's prospects, I'd love to hear it.