Update July 7th, 2019: I got to be a guest on the recent Enterprise Software Podcast (click here) to discuss the Acumatica Acquisition.
HUGE news from June 19th, 2019. Acumatica announces that they have been acquired by EQT Partners.
EQT Partners is headquartered in Stockholm, Sweden.
EQT Partners already owns IFS (Industrial and Financial Systems) which is headquartered in Linköping, Sweden.
It took me a week to digest the news and put together this post.
This is going to be a long post, but it should be, because this is really BIG news.
This blog post is structured in 4 sections:
- First, let’s look at a bunch of quotes from several news articles together with my interspersed commentary.
- Second, let’s learn a little more about the EQT investment firm that acquired Acumatica and the IFS software company that EQT already owns.
- Third, some of my overall thoughts.
- Last, I reached out to some Acumatica VARs and ISVs to get their thoughts. I’m publishing their quotes here, with their permission of course.
First: Quotes from News Articles with My Commentary
EQT Partners acquisition paves the way to a top 5 ERP entity.IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Top 5? Seriously? Wow, this is quite a jump for Acumatica!
EQT Partners, a leading investment firm with $45B (€40B) of assets under management, has announced the signing of a definitive agreement to acquire cloud-native enterprise software provider Acumatica through an investment vehicle owned by the same holding company that holds IFS AB (Industrial and Financial Systems).IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
$45 billion? Ok, they must know what they are doing.
From Mickey North Rizza, Program Vice President Enterprise Applications, IDC: “I closely evaluated IFS and Acumatica for The IDC MarketScape: Worldwide SaaS and Cloud-Enabled Operational ERP Applications 2019 Vendor Assessment”
I don’t have $15,000 lying around to go read that report for myself so I’ll take Mickey’s word for it.
Jonas Persson will serve as chairman for both companies.IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Ok, shared leadership. To be expected. Time to learn more about Jonas Persson. Does he have a history of innovation or will he take his existing cookie-cutter and apply it to Acumatica as time goes on, AKA the Sage Software approach. I’m hoping he has a history of innovation.
Competing directly with SAP, Oracle, Microsoft, Infor, and Sage among others.IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Acumatica has always been ambitious. Looks like they found a group that is equally ambitious.
IFS can bolster Acumatica’s ability to globalize and expand in key industries, while Acumatica can support IFS with increased functionality in business intelligence, analytics, and extensive experience of providing a true born-in-the-cloud ERP software-as-a-service offering.IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Acumatica has experience in Business Intelligence!?! Are they talking about DataSelf here? Or maybe the mysterious future Business Intelligence that Mike Chtchelkonogov just mentioned last week at the Acumatica Virtual Developer Conference?
Darren Roos, who will assume a position on Acumatica’s board of directors.IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Welcome Darren. I hope you’re at least half as cool as Jon Roskill.
From IFS CEO Darren Roos: “IFS and Acumatica can benefit from one another’s resources, capabilities, and strategies, but still enjoy full autonomy and rapid growth trajectories while avoiding disruptions to business operations or brand equity.”IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Full autonomy huh? I like that. Keeping brand equity intact? I like that too. But for how long? The longer the better in my opinion.
From Acumatica CEO Jon Roskill: “We could not have asked for a better match of technologies, strategies, and cultures … Acumatica is positioned to expand into new markets and offer true global support for our rapidly expanding international customers.”IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Expanding into new markets. Jon Roskill is good at this. He’s very comfortable on the international stage.
The transaction is expected to close in the third quarter. Terms of the transaction were not disclosed.IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Third quarter huh? Excellent. That’s plenty of time for them to put a bow on it before the next Acumatica Summit in January.
The two companies will tap into one another’s ISV, reseller and systems integrator communities, cross-pollinate technical resources and roadmaps, and implement best practices across services and support to enable efficiencies of scale and rapid growth that are mutually beneficial.IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Cross-pollinate? More on that later. When we hear “best practices”, now we know that Acumatica is definitely playing on the big kids playground. Before now it’s been more about “disruption”, “growth”, and railing against “stodgy”.
Acumatica delivers unparalleled value to more than 5,000 small and midmarket organizations through our team of 275 worldwide employees and 300 channel partners.IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
About IFS, “Our team of 3,500 employees supports more than 10,000 customers worldwide from a network of local offices and through our growing ecosystem of partners.”IFS and Acumatica to form global cloud ERP powerhouse under EQT ownership (June 19, 2019)
Getting out my calculator, looks like IFS has almost 13 times as many employees as Acumatica, but only 2 times as many customers. Could that mean that the average IFS customer is significantly larger than the average Acumatica customer? More on that later.
Acumatica acquired by global private equity firm in bid to take on Oracle, Microsoft and other business software giants.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
No lack of ambition here.
The goal, Acumatica CEO Jon Roskill said, is to form a “powerhouse” of enterprise resource planning companies that will eventually generate $1 billion a year in revenues and compete with the biggest players in the ERP business.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
“We’ll be within that billion dollar target within three years,” Roskill said in an interview from Paris, where he had been closing the deal.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
The “we’ll” in this statement has to be Acumatica combined with IFS. I don’t see how Acumatica could hit this on their own in 3 years. I get the impression from this article that Jon made extra time for Geekwire since they are based in Seattle, even though he had to conduct the interview from Paris.
Acumatica expects to increase its workforce by 40 to 50 percent each year, including in the Seattle area where the company employs about 50 people.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
Beautiful, love it. I wonder if this will also include increases in Columbus, Ohio where I currently reside. Adding 40%-50% each year? Wow, Human Resources just became the most important department within Acumatica. I guess that’s why they hired Martha Lucia Groulx last year.
The company currently employs 265 people worldwide.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
Different than the 275 employees mentioned above, but not too far off.
The company was founded in 2008 by John Howell, Mike Chtchelkonogov, and Serguei Beloussov, who also founded companies including Parallels and Acronis. Acumatica is #28 on the GeekWire 200, a ranking of the top privately held technology companies in the Pacific Northwest.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
Although the company was founded in 2008, I think work on the product began in 2006 (more on that later). Thank you John for applying your decades of experience at Solomon Software to Acumatica (focused exclusively on Midmarket ERP with a 100% channel go-to-market approach). Thank you Mike for building such a cool product and never taking your foot off the gas pedal. Thank you Sergey for your investment money.
Acumatica will be able to use IFS offices in the U.K. as well South Africa, where Acumatica currently has one employee working out of his own home.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
Very interesting. Things have gone from bad to worse for Sage Software. Acumatica has beat them back significantly in North America. Now it looks like Acumatica is going to take the fight to Sage’s home turf in Europe. Personally, I don’t have a problem with that, as you can see in this picture 🙂
IFS support centers, which span 15 countries, make it possible for Acumatica to serve customers as they begin scaling up to a global level.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
That means IFS employees will start cross-training on Acumatica? Or is this just a continuation of the point about Acumatica putting bodies in IFS offices?
IFS, meanwhile, will be able to take advantage of Acumatica’s 350 channel partners.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
Calling all Acumatica partners. If you have been looking to get into the upper Midmarket, but weren’t interested in Dynamics AX or Sage X3, you might want to consider IFS.
IFS executives like that Acumatica is based in one of the world’s technology hubs and has close relationships with companies such as Microsoft.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
This slide showing Acumatica headquartered between Microsoft and Amazon headquarters never gets old.
From Jon Roskill: “We’re not giving numbers but everyone is leaving happy. I promise you that.”IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
After Jon said this, he probably rattled the keys in his pocket to his new Lamborghini. Or maybe, being such a big sports fan, he’s saving up to buy a professional sports franchise. Maybe bringing the NBA back to Seattle?
The new Acumatica board will include Roskill, Persson, and IFS CEO Darren Roos, among others.IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
Continuing on the sports theme, will this be a big happy family like the Big 3 era in Miami with multiple titles to show for it? Or will it be like the Los Angeles Dodgers payroll (minus a championship). Only time will tell.
From Jon Roskill: Placing IFS executives on Acumatica’s board is part of a broader “incentive structure that’s going to drive the leadership team for both companies to do the right things for their sister company.”IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
Do the right things for their sister company huh? Like kick the crap out of any bullies that try to pick on their sister on the playground? That’s the 2nd playground analogy so far for those keeping score.
From Jon Roskill: “I’m going to have money in both (companies) personally. There’s nothing like having money in a company to make you pay attention.”IFS and Acumatica to Form Global Cloud ERP Powerhouse Under EQT Ownership (June 19, 2019)
Money = Attention. Got it. The amount of EQT Assets Under Management money sure got my attention, and it wasn’t even mine.
IFS (Industrial & Financial Systems) is known for its Field Service Management (FSM), Enterprise Asset Management (EAM) and Enterprise Resource Planning (ERP) systems.The Cross-Pollinating Cloud: IFS Conjoins With Acumatica (June 19, 2019)
It’s time to start learning more about the history of those 3 products.
Acumatica is also a cloud-native ERP specialist, but is also known predominantly in North America for its integrated business management applications, including financials, distribution, project accounting and Customer Relationship Management (CRM) technologies.The Cross-Pollinating Cloud: IFS Conjoins With Acumatica (June 19, 2019)
Yep, they got that right. Interesting that Manufacturing isn’t listed here, especially since it fits so well with IFS.
The coming together of IFS and Acumatica under the EQT Partners umbrella is said to be a ‘structured investment’ to ensure that both companies have a stake in each other’s success.The Cross-Pollinating Cloud: IFS Conjoins With Acumatica (June 19, 2019)
Hopefully this keeps the existing Acumatica leadership team onboard and engaged for many years to come.
This everybody-in-bed togetherness is hoped to foster a new era for both businesses where they can cross-pollinate technical resources and roadmaps.The Cross-Pollinating Cloud: IFS Conjoins With Acumatica (June 19, 2019)
Everybody-in-bed and cross-pollinate in the same sentence. I hope they “put a ring on it” first.
This sharing and twinning of resources, roadmaps, customer exposure points and best practices usually only happens when one major-scale vendor decides to partner (or sometimes engage in co-opetition) with one another.The Cross-Pollinating Cloud: IFS Conjoins With Acumatica (June 19, 2019)
Co-opetition? My buzzword meter is starting to go off.
In this case, it’s still happening on friendly terms, but it is being orchestrated under the auspices of the parent private equity organization — not to suggest for one second that there is any element of an arranged marriage here.The Cross-Pollinating Cloud: IFS Conjoins With Acumatica (June 19, 2019)
So they aren’t going to put a ring on it?
At the outset at least, the whole C-suite in both firms appears to be staying on and all parties insist that they are keen to cross-pollinate like busy bees.The Cross-Pollinating Cloud: IFS Conjoins With Acumatica (June 19, 2019)
But bees only allow for one queen. Seems like there are two queens (or kings) in this situation.
No animals or humans were apparently harmed during the initial stages of this cross-pollination process, but you can keep some Neosporin on the side in case of occasional stings and bites during any coming together of industry forces like this.The Cross-Pollinating Cloud: IFS Conjoins With Acumatica (June 19, 2019)
Neosporin. Ah, much better, that’s more like it. Way to silence the buzzword meter alarm.
Existing shareholders and management will re-invest significantly into the Company, while EQT will have majority ownership.EQT Acquires Acumatica – a US-based ‘Cloud-native’ ERP Software Vendor – In Connection with its Existing IFS Investment (June 19, 2019)
I would love to know how many current Acumatica employees will be getting equity.
Acumatica will focus on small to medium sized businesses while IFS will continue to focus on larger enterprise customers.EQT Acquires Acumatica – a US-based ‘Cloud-native’ ERP Software Vendor – In Connection with its Existing IFS Investment (June 19, 2019)
Yes! I was hoping to see something like this. Evidence of a line in the sand, borders drawn, reducing the risk of a takeover of Acumatica in the future.
The two companies are expected to benefit from cross-pollination of R&D capabilities and a synergistic geographic and end-market footprint.EQT Acquires Acumatica – a US-based ‘Cloud-native’ ERP Software Vendor – In Connection with its Existing IFS Investment (June 19, 2019)
“Cross-pollination” seems to get coupled with something equally ridiculous in these articles. This time it’s “synergistic”.
Acumatica will continue to operate as an independent company, led by CEO Jon RoskillEQT Acquires Acumatica – a US-based ‘Cloud-native’ ERP Software Vendor – In Connection with its Existing IFS Investment (June 19, 2019)
Ah, music to my ears. Personally, I would have added “with more money in the bank” to this sentence.
From Johannes Reichel, Partner at EQT Partners and Investment Advisor to EQT VII: “EQT is very excited to back Jon and the greater leadership team at Acumatica.”EQT Acquires Acumatica – a US-based ‘Cloud-native’ ERP Software Vendor – In Connection with its Existing IFS Investment (June 19, 2019)
Everyone always seems to be “excited” in these news articles. For once I’d like to hear something like “stressed out” or “looking forward to more money, but not the insane amount of work that lies ahead.”
From Darren Roos, CEO of IFS: “I am a huge admirer of what Jon has achieved and look forward to being part of the next chapter of Acumatica’s story.”EQT Acquires Acumatica – a US-based ‘Cloud-native’ ERP Software Vendor – In Connection with its Existing IFS Investment (June 19, 2019)
Let’s keep that admiration going for many years Darren!
From Serguei Beloussov, CEO of Acronis, Founder and Chairman of Acumatica: “Acumatica has built one of the leading cloud platforms in the world since we founded the business in 2006 … EQT’s investment will allow Acumatica to focus on achieving its goal to become the global market leader in the cloud ERP market and continue to accelerate its xRP platform development to better support to its current and future ISVs and OEMs.”EQT Acquires Acumatica – a US-based ‘Cloud-native’ ERP Software Vendor – In Connection with its Existing IFS Investment (June 19, 2019)
2006? Not 2008? I think 2006 is when they started working on the product and 2008 is when the US company formed. I love hearing Serguei say, “accelerate its xRP platform development.” I think a big concern many of us have is whether the platform investment will continue. Serguei seems to think that it will. That makes me a lot more comfortable.
Jefferies acted as financial advisor and Kirkland and Ellis LLP acted as legal advisors to EQT VII. GCA acted as financial advisor to Acumatica and Willkie Farr & Gallagher as legal counsel.EQT Acquires Acumatica – a US-based ‘Cloud-native’ ERP Software Vendor – In Connection with its Existing IFS Investment (June 19, 2019)
Ok, this all sounds very official.
Two ERP vendors, IFS and Acumatica Inc., have completed what can best be described as a near-merger. They will share board leadership, expertise and market strengths, but will maintain their independence — for now.ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
A “near-merger” sounds like a good way to describe this transaction.
EQT Partners, which bought ERP vendor IFS in 2015, has acquired Acumatica.ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
So EQT has only held IFS for 4 years now huh? I wonder what kind of ERP experience EQT had prior to IFS.
IFS is on course to make about $720 million this year, said IFS CEO Darren Roos. He put Acumatica revenue at about $40 million.ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
IFS has about 10,000 customers focused on five markets: aerospace and defense, energy and utilities, engineering and construction, manufacturing and service.ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
Acumatica has about 5,000 customers. It operates in some similar markets as IFS, but focuses on smaller firms.”ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
Picking up from an earlier comment about the average IFS customer being significantly larger than the average Acumatica customer. Getting out my calculator again, that puts IFS annual revenue per customer at $72,000 and Acumatica annual revenue per customer at $8,000. I’d say “significantly larger” is a pretty accurate statement. But, wait, the $8,000 number looks kind of low, especially when I compare it to the Acumatica price list and especially when you consider that some of that revenue is likely due to services. Hmmm, I wonder what’s going on there.
Rebecca Wettemann, vice president of research at Nucleus, … expects Acumatica to bring a lot of startup energy to the deal, while IFS will contribute its global reach and experience.ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
IFS … customer base still tends to be pretty traditional and more going toward on-premises deployments.ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
Will IFS be able to handle the startup energy, especially given the more traditional industries they play in (more on that later)?
Roos also cited Acumatica’s management automation of its cloud application as a key capability.ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
You da the man Jayson Keidel!
The deal itself is “structurally a merger without being a merger,” Roos said.ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
“Does that mean that the businesses will always be separate? No, it doesn’t,” Roos said, but it doesn’t make sense to merge them at this point.ERP vendor IFS makes a near-merger with Acumatica (June 20, 2019)
Did Roos go too far with these statements? Is he already trying to take a bigger piece of the pie than he’s been given? Does he have the authority to merge them? Hmmm, hopefully the bee stinger isn’t showing already 🙂
This is not an acquisition by IFS, per se, but rather a tight affiliation between the two companies.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
This is a very important distinction given the “acquisition fatigue” that customers are feeling of late, particularly in the cloud ERP market.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Tell me about it. The only thing worse than an acquisition is an acquisition AND a rebranding of a product. Cough, cough, SAGE, cough.
IFS is very big in asset-intensive industries and has, not surprisingly, a large following of customers in Europe. It also has offices in many parts of the world (a large one is in Itasca, Illinois). The company has been around many years and has a number of large aviation, capital equipment and other customers.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
I wonder how big that Chicago area IFS office is.
Acumatica views its main competitor as (Oracle) NetSuite, and also competes against Sage Intacct.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Acumatica has definitely been very specific in targeting NetSuite from the very beginning.
IFS is a long-time, European ERP firm that targets large firms, in complex industries all over the globe.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Acumatica is a newer, US-based ERP firm with strong accounting functionality and lots of channel partners working well for them.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Europe vs. U.S. – Large Firms vs. Smaller Firms – Complex Industries vs. Simpler Industries. I wonder how good the IFS channel partner network is.
Going forward, Acumatica will focus on firms of approx. $200 million revenue or less. IFS will focus on larger entities.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Yes! Another clear line drawn in the sand. Let’s stick to it. Build the wall! Make Acumatica great again!
IFS’ skunkworks efforts are fairly rich. They have demonstrated capabilities re: drones and other advanced tech years before competitors did.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Gotta love skunkworks, but not skunks of course. Very cool. And very appropriate that Acumatica had a drone onstage just a few months ago at Acumatica Summit 2019 in Houston.
Above all, Acumatica has a channel program that rivals Intacct’s (now part of Sage Group) in its ability to recruit and enable its partners.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
It will be interesting to see how many Sage Intacct partners will now feel comfortable to pickup Acumatica now that they are fueled by the kind of money that Sage can throw at things.
IFS should be able to exploit the cloud experience and AWS knowledge of Acumatica.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
But isn’t IFS running on Microsoft Azure, not AWS? More on this later.
IFS acquired a company, WorkWave recently. It’s an all-cloud firm with over 8,000 customers. WorkWave is a big field service solution that could be a great first step in joint development/integration between the two firms … WorkWave could deliver quick hits for both companies.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Hmmm, definitely keep an eye on the future of the Acumatica Field Service Edition, one of the more compelling Acumatica Mobile App use cases in my opinion.
A potentially big synergy could come from the sale of Acumatica solutions into IFS’ larger enterprise customers.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Kind of reminds me of how NetSuite would sell into larger enterprises, especially in “Financials only” situations. Very interesting.
To make this deal a big success, EQT needs to ensure that:The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
1. This deal should trigger many years of unbridled growth. The harvesting of shareholder capital can happen years later when the firms hit maturation.
2. This deal should NOT be about financial engineering but rather on building two vendors into behemoths.
If EQT only acquired IFS 4 years ago, I wonder how patient they will be. Hey sharholders, how about harvesting your capital “decades” later rather than “years” later. Pretty please!
Acumatica’s culture is young, aggressive and scrappy. Nothing should be done that would disrupt the workforce of either firm and changes in management teams and directions should be kept to an absolute minimum.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Preach it Jon and Brian!
Handlers aren’t ‘assigned’ to the executives of Acumatica.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Yes, no babysitting please. Acumatica may be a “Rambunctious Teen” but they get A’s on all of their exams. They only “act out” when they aren’t being challenged enough intellectually 🙂
To grow aggressively, both firms will need to retain all of the best and brightest people they have. They can’t deliver outsized growth if they are creating job vacancies.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Job vacancies? That reminds me of an Acumatica competitor. Won’t mention names, but 1. The logo is green. 2. The name starts with the letter “S”. 3. The name (very appropriately) rhymes with “age”.
Brian’s Viewpoint: This deal should be a win-win for everyone involved … Personally, I think the management teams at both firms should mesh. Both firms have a lot of good people and yet each has a way of making their events (and customers) happy. Acumatica’s fun, energetic culture is infectious and it just might creep into IFS’ (and that would be just fine) … Our first real look at exactly how things will mesh will likely be at IFS World Conference in Boston this October.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Wow, that means a lot, especially coming from Brian.
Jon’s Viewpoint: Acumatica is the only cloud ERP player I know of to have a partner build an entire vertical on their platform (Manufacturing). As the ERP market continues to verticalize, IFS can gain from Acumatica’s platform know-how here … It is important to note that this deal also removes Acumatica’s remaining Russian investors from the equation. While I have nothing against Russian investors and Acumatica’s leadership was always upfront when we asked about their role, in the current geopolitical environment, this was always an awkward aspect of Acumatica’s growth profile. Now any questions about that are settled.The coming together of ERP firms Acumatica and IFS – an early analysis (June 19, 2019)
Platform, platform, platform. Yes, keep the platform momentum going! Great point about the Russian investors. I love Acumatica’s Russian development team in Moscow. They are wicked smart. But the Russian ownership could have been a problem if Trump triggered WWIII. Some competitors tried to stoke the Russian fears in the sales cycle because their legacy products were getting their butts kicked (Deltek was particularly desperate in this area).
It’s not hard to see a scenario where an all-out sale was the least unattractive option as the company likely burned through more than $25 million in losses over twelve months.No Collusion, No Financials in Acumatica Rollup (June 20, 2019)
This is an interesting quote from an article written by a competitor. Thanks to Darcy Boerio for point out this article to me. They speculated that Acumatica might be burning through money too fast. Jon Roskill actually responded on the bottom of the blog post:
EQT Partners bought a stake in IFS in 2015, and, judging by its transaction history, doesn’t hold onto investments for very long.Will Private Equity Takeover Benefit or Hurt Acumatica? (June 25, 2019)
Finishing this first section of quotes with 2 cautious quotes from a CFO.com article. Finance folks always seem to be the grounded naysayers. This quote about EQT transaction history is interesting. Maybe EQT could spin Acumatica back out in the future before getting gobbled up by IFS?
Acumatica users in the United States, cross your fingers.Will Private Equity Takeover Benefit or Hurt Acumatica? (June 25, 2019)
Ok, fingers crossed 🙂
Second: About EQT/IFS, Including Quotes from Diginomica
Technically, Acumatica got acquired by EQT.
Here are some fast facts about EQT from their website:
- Founded in 1994 in Sweden
- 600 employees, of whom 330 are within the Investment Advisory teams
- Offices in 15 countries across Europe, Asia and North America
- More than EUR 61 billion in raised capital, invested in 240+ companies and 110 exits (excl EQT Credit)
- EUR 21 billion in total sales within EQT portfolio companies with 119,000 employees
- Around EUR 40 billion in assets under management
Since all indications so far are that this is a long-term investment and not a temporary acquisition that will be “flipped” in the near future, it seems like Acumatica and IFS will be joined at the hip for the foreseeable future. Maybe we’ll even see a formal merger in the future.
Because of this, it’s important to get to know IFS.
Like EQT, IFS is based in Sweden. What well-known company is also from Sweden? Ikea. Is Ikea insanely efficient? O ya! Is efficiency a good trait for an ERP software company? Absolutely! There, that’s it for my in-depth, “American geographically illiterate” analysis of Sweden 🙂
Speaking of geography, I wonder if Visma played a role in getting this deal done. A similar deal on a smaller scale was done back in August 20, 2013 (click here) where Visma invested in Acumatica. It’s kind of interesting to put Visma, IFS, and EQT Partners on a map. They are very close to each other:
Ok, how about some more substantive analysis. Let’s turn again to our super-smart friends at Diginomica. More quotes with my commentary.
IFS is not the first vendor to embrace the Microsoft arsenal. I’ve heard similar stories from competitors such as Unit4, SYSPRO, Acumatica and more.IFS nails its apps to Microsoft’s technology stack pole (November 14, 2016)
Except that Acumatica actually manages their Cloud on Amazon, not Microsoft.
One IFS executive remarked that they’re in the applications business not the technology business. That is why they’ve chosen to rely on Microsoft to power many components of their tech stack going forward.IFS nails its apps to Microsoft’s technology stack pole (November 14, 2016)
Turning over cloud management and operations to Microsoft makes sense as few software firms will ever have the scale, customer base or capital appetite to match the abilities of Amazon or Microsoft.IFS nails its apps to Microsoft’s technology stack pole (November 14, 2016)
Personally, I like this approach that both Acumatica and IFS have taken. In theory, the Amazon / Microsoft Azure infrastructure costs only go down in the future as things scale. And it allows you to focus on the application which is especially important in ERP.
IFS’ last major release (#9) was announced 18 months ago at the last IFS World event with most customers gaining access to the product approximately one year ago. Today, about 20% of IFS’ 1 million users are currently on release 9.IFS nails its apps to Microsoft’s technology stack pole (November 14, 2016)
Definitely seems like a lower adoption of the latest version than with Acumatica. I wonder if it’s a European thing, a Manufacturing thing, an On-Premises thing, or some other thing.
About a year ago, IFS acquired VisionWaves, a Dutch firm that made a good looking dashboard and process automation tool. That tool, now called Enterprise Operational Intelligence (EOI), has been integrated with the IFS applications and the new IFS IoT connector technology.IFS World 2016 – intelligence, cloud, partners and the wrap (November 15, 2016)
This tool was originally designed to accept all kinds of data from all kinds of systems not just IFS. As a result EOI can accept data from older versions of IFS software, competitor ERP systems, non-ERP data and more.IFS World 2016 – intelligence, cloud, partners and the wrap (November 15, 2016)
Very interesting. Depending on the price point, maybe we see VisionWaves integrate with Acumatica in the future.
The core IFS solutions are available as on-premises, private cloud or hosted single-tenant solutions.IFS World 2016 – intelligence, cloud, partners and the wrap (November 15, 2016)
Sounds just like Acumatica, except that Acumatica can also do Multitenancy.
IFS has relationships with major systems implementers like Accenture.IFS World 2016 – intelligence, cloud, partners and the wrap (November 15, 2016)
Impressive. Can these relationships bear fruit for Acumatica, even if they are only in the form of lead generation for Midmarket ERP consulting firms?
Brand awareness in North America must become a priority. IFS’ historic growth rate has been around 8-10% YOY. Their private equity owner, EQT Partners, believes that more growth is possible. Will EQT have the appetite and funding for a more meaty growth rate? It’s hard to get one without the other in current markets.IFS World 2016 – intelligence, cloud, partners and the wrap (November 15, 2016)
Interesting comment about North America. Can Acumatica help with this? Don’t investors always believe that more growth is possible? More, more, more. The “growth pressure” will definitely get more heavy now for Acumatica. But probably not as bad as if they had gone public.
IFS is a Swedish manufacturing ERP software firm with a strong presence in asset-intensive industries (e.g., aviation, pipelines, oil & gas, etc.).State of Manufacturing ERP – Part 3, vendor profile – IFS (May 11, 2017)
These are the two words that I will think of related to IFS: Manufacturing and Asset-Intensive. Is Asset-Intensive one word?
I now realize that IFS may be much further along in: Understanding the IoT space vis-à-vis their competitors.State of Manufacturing ERP – Part 3, vendor profile – IFS (May 11, 2017)
This is very interesting. Personally, I’d love to work on more IoT projects with Acumatica. Maybe IFS can help with that.
IFS grew revenue 15% for the last full reporting year with a 23% growth bump in Q4 alone. Cloud offerings are driving a third of new bookings. IFS has a large European install base and a respectable number of defense industry customers.State of Manufacturing ERP – Part 3, vendor profile – IFS (May 11, 2017)
Pretty good evidence that IFS is doing well moving to the Cloud.
Approximately 44% of the company’s revenue comes from services. While mega-partners like Accenture were a presence at the user conference, I suspect more channel partners would like a crack at these service monies. Digitally-focused firms will find IFS’ approach to IoT more detailed and enlightened than many competitive offerings.State of Manufacturing ERP – Part 3, vendor profile – IFS (May 11, 2017)
That’s a very high services number. Makes me wonder if IFS has a lot more work to do in cultivating a channel. I’m sure Jon Roskill can help with that.
Looking back on the spring conference season, one standout may surprise: IFS World 2018, the IFS user conference in Atlanta. IFS stood out because: 1. Customers were honest and easy to talk to … 2. A leadership transition was handled transparently, instead of over-polished “this is all going smoothly” fakery.Does ERP, field service and asset management add up to operational IoT? An IFS analysis (July 5, 2018)
Sounds a lot like Acumatica.
CEO Darren Roos, formerly of SAP, joined IFS in March 2018, so he’d been on the job only weeks when IFS World rolled around. I feared he’d be a bit gunshy, but Roos was eager to get into the fray with media/analystsDoes ERP, field service and asset management add up to operational IoT? An IFS analysis (July 5, 2018)
Wow, this Acumatica acquisition is not even 2 years into Darren Roos’ tenure at IFS. His “eager” attitude sounds a lot like Jon Roskill.
I had a partner in here yesterday. It was quite emotional, actually. They’ve been doing IFS work for a long time. For some or other reason, somebody decided they didn’t like them. They have 160 people in the company, 60 of which are IFS resources, and we would not partner with them. They were a “rogue partner,” I think was the terminology that’s used.Does ERP, field service and asset management add up to operational IoT? An IFS analysis (July 5, 2018)
More evidence that IFS has work to do in building their channel. But it sounds like it was a problem Roos inherited, not created.
IFS has a midmarket focus, but Roos made it clear he intends to pursue customers in the higher end of that market.Does ERP, field service and asset management add up to operational IoT? An IFS analysis (July 5, 2018)
This is consistent with the $200 million revenue line in the sand drawn above.
On July 2, IFS announced the completion of their new senior leadership team with a new CCO, and a regional president for APJ/ME & A.Does ERP, field service and asset management add up to operational IoT? An IFS analysis (July 5, 2018)
Let’s hope these changes are settled for the next few years and the Acumatica leadership remains untouched for as long as possible.
Third: My Overall Thoughts
I have always been afraid that Acumatica might get acquired by Microsoft, Sage, or another major player who just wanted to make them go away. As a hands-on ERP person who has to spend years building skills on a specific ERP product, that would have been a nightmare scenario for me.
But another problem scenario would have been if Acumatica continued for too long in startup mode without a major funding round that would enable rapid expansion.
So I’m happy that Acumatica is now officially mainstream, enabled by the EQT acquisition and the financial wizards behind it.
I’m happy for the Acumatica leadership team, especially Mike Chtchelkonogov (“Mike C.”), for the sense of validation that this deal brings and the financial rewards that hopefully set them up rather nicely. They deserve it for having the audacity to build an ERP product from scratch on modern technology and having even more audacity to continue to dump tons of development resources into the core platform. That’s not an easy lift, lots of blood, sweat, and tears.
I hope they all get to go to exotic places and drink $1,000+ bottles of wine in celebration.
But what matters most to me personally is the future of the product itself.
Acumatica has highlighted numerous times in recent years the fact that 70%+ of their employees are devoted to the product.
I like the quote above that talked about Acumatica increasing “its workforce by 40 to 50 percent each year”. I just hope that most of those employees continue to be devoted to the product. I’m optimistic given the “accelerate its xRP platform development” comment from Serguei Beloussov earlier.
Everything about this deal seems to indicate that we’ll see continued innovation from Acumatica in the future.
My eyes are on Mike C. to see how long he stays at Acumatica. As long as he stays, I have zero concerns. If he decides to go after fulfilling whatever number of years are required by this deal, then I’ll be a little concerned. But I’ll be very happy for Mike because he deserves a break (and some sleep).
Even then though there will likely be a great transition plan in place. And we’re likely years away from that even happening.
In the wild speculation / gossip category, I wonder if we’ll see Acumatica acquire JAAS Systems, the developers of the Acumatica Manufacturing Edition, in the next 1-2 years. It would make sense, especially given the fact that IFS is already focused on Manufacturing. Acumatica already has some kind of sales relationship in place to sell it as the “Acumatica Manufacturing Edition”, but I’d love to see them acquire the whole thing, including the JAAS Systems developers and consultants who already have a great working relationship with existing Acumatica employees.
Finally, another thing I love about this acquisition is that IFS is already in the “larger company” space. Given the amount of time that Acumatica spends talking about chasing NetSuite, I’ve always been concerned that Acumatica would be tempted to follow NetSuite and chase larger companies in the future. Since IFS is already in that “larger company” space, there is now a firm “upper bound” on Acumatica. This acquisition removes that “larger company” concern and makes me even more comfortable that Acumatica will continue to do what they’ve always said they would do: stay focused on Midmarket companies.
Bottom line, I’m optimistic that Acumatica will retain their “we love the product” culture for the foreseeable future and spread awareness of the Acumatica product to A LOT more people through beefed-up marketing courtesy of this acquisition, all while maintaining their lazer focus on the Midmarket.
Fourth: Quotes from Acumatica VARs and ISVs
I reached out to several Acumatica VARs (Value Added Resellers) and ISVs (Independent Software Vendors) to get their opinions on the acquisition, including where they were when they heard the news.
Reproducing those opinions here, listed alphabetically by first name.
Note: If you’d like to submit your thoughts, it’s not too late. Just contact me (click here) and I’ll get your quote added to the list.
Acumatica is an innovator and, unlike other publishers, they focus on adding new features and technology to Acumatica.
I believe Acumatica’s focus on partners is also a very important part of their DNA and I hope this doesn’t change in the years to come. Jon Roskill is still in charge which is good. I just hope EQT doesn’t change their approach to partners.
Finally, why Acumatica agreed to get acquired. These days money plays a very important role in the growth of companies and Acumatica needs funding to compete effectively with NetSuite, Microsoft and others.
Being an optimist, I think this is good news for Acumatica and Acumatica partners.Alec Baghdasaryan – Information Integration Group, Inc.
The “aqui-merger” of these two great companies under the EQT umbrella strikes the perfect balance of scale, funding and innovation. Acumatica always was one of the most innovative, albeit small, ERP companies completely focused on a single product.
What it lacked in massive backing and funding it made up for in delivering a great product and running a well oiled machine under the excellent leadership team of Jon, Ali, Nigel, Doug, Christian, Ajoy, Geoff, Mike, Sean and others. The fact that the Acumatica team will remain intact is therefore welcome news.
Now with the backing of EQT and the scale of IFS, Acumatica stands to take on the best and beat them! By the way, I had a brief stint with IFS in 2007 and was in awe of their product depth and breadth, not to mention the size of clients they had on board.Bernard Ford – One Channel Cloud
Given the current and future value of the Acumatica framework, it was inevitable that an equity transaction had to happen. This was the best we could have hoped for. Superior platform and now the capital to grow the market. Move over Magic Johnson (NetSuite celebrity spokesperson).Dan Schwartz – NexVue
My first thoughts are that it is helpful to partners in a few ways:
1. Ownership of the company is not linked to Russia which could be helpful in selling to companies that are anti-Russian in their perspective. I mean, who doesn’t like the Swedes?
2. More funding for a growing company is never a bad thing.
3. Perhaps better name recognition throughout the world?David Eichner – ICAN Software Solutions
After two decades of working with major ERP publishers, we’ve found our partnership with Acumatica can be best described as “refreshing”. Throughout our initial certification and our subsequent project to integrate our procurement functionality with the Acumatica Construction Edition, we’ve been pleasantly surprised with their investment in our partnership and willingness to dedicate resources to enable us to bring our solutions to their markets.
This is not the first time we’ve had one of our publisher partners experience this type of transition, and while historically there has always been a certain degree of pivoting involved for all parties, we’ve always managed to navigate the waters and keep the partnerships strong. If Acumatica retains the great talent they have in place and continues the partner-friendly mentality (not just with respect to VAR partners, but Marketplace partners, as well), we expect not only will this be a great outcome for all due to the increased financial resources, but perhaps a new opportunity for us to go to market with our existing international and enterprise level solutions through this partnership.Foy Mainor – Paramount WorkPlace
The acquisition will solidify Acumatica’s position in the ERP world and help fuel the growth even more. All the exec team stays on board with the ability to tap info IFS resources. As the only Excel-based Financial Report Writer ISV 100% focused on Acumatica and the different OEM derivatives, this is extremely positive news.Gabriel Michaud – Velixo
Very bold strategic move and will add huge value to the partners to gain more visibility on other markets, industries and regions. Well done Acumatica and looking forward to the new chapter.Gerhard Van Den Heever – One Channel Cloud
It’s great that Acumatica now has a financially strong background with EQT partners. However, important to use the opportunity and move the focus going forward from SMB’s towards larger enterprises.Gunnar Björn – Centara
I was on a family vacation in the Swiss Alps passing through the mountains when I saw my emails and social media messages hitting the feed. Now I had a choice to enjoy the view of the mountains or read the big news of the Acumatica acquisition. I choose the ERP mountain acquisition news.
As I learned more about IFS and EQT, that strengthened my trust, and I quickly informed my team and started to congratulate Acumatica folks on Skype whom I’ve known personally for the last 20+ years for their commitment and putting a superior product out there.
Finally, the word of comfort from a top executive at Acumatica was “Best is no management changes, all the same people will stay.” Such acquisitions bring lots of changes and retaining human talent and SME’s is most important in this industry.
Acumatica was the fastest growing ERP Company and I knew they had 2 choices, to either get listed on NASDAQ or get acquired, and the later happened much quicker than I thought. I was hoping after the Vegas Summit next year they could be acquired or they needed another round of funding to keep it growing. The acquisition gives IFS and Acumatica space to grow and compete with the big old boys club: SAP, NetSuite, Sage etc.
All ISV/Partners might be involved in cross pollination of their solution. We are excited to see that our plugin/extension for the Print and Jewelry industry may find larger clients too.
We are excited to see the growth of Acumatica in last 10 years. With InfoSourcing being part of the channel the last 6+ years and having built 3 great plugins/extensions using the xRP platform, we are planning to grow. We look forward to Acumatica Summit 2020 in Las Vegas and I’m positive it’s going to be a win-win for all of us involved.Harsha Sarjapur – InfoSourcing
We are thrilled about Acumatica being acquired. They are clearly a leader in the Cloud ERP space and the acquisition validates it. Acumatica can now accelerate even more their pace of innovation.Jim Bertler – Logan Consulting
Overall, a net positive. The original founders were due to cash in and all things considered this is favorable to the partner and VAR channel. Our investment in Acumatica is sustained.
I hope that new owner will invest in Acumatica name recognition and improve competitive positioning especially tools focused on verticals.
I heard the news from a couple of emails received within a couple of minutes from a couple of sources. 🙂Jim Carroll – Advanced Solutions & Consulting Co.
The acquisition of Acumatica by EQT Partners and planned collaboration with IFS is a tremendous win for Acumatica. The financial backing and knowledge sharing will allow Acumatica to accelerate their go to market strategy to the benefit of customers and partners. We are witnessing the birth of a Cloud ERP giant.Joel Gress – Dynamic Tech Services
I was reading the news and before I finished members of our team had started calling. Great news and further validation that Acumatica is THE system for the market. Someone actually bought them as a prized investment versus others who were saved from continuous and embarrassing losses year after year. We are more excited about Acumatica than ever!John Gabrys – Crestwood
This is a great thing for Acumatica from my personal perspective. It allows them to go more global which doesn’t impact a lot of the North America VARs but it impacts us with the Manufacturing Edition. This also doesn’t impact a lot of the Acumatica ISVs currently but may offer them the ability to pursue markets outside North America.
It also allows Acumatica to stay “independent” as they were not acquired by another software vendor, i.e. Oracle/NetSuite where changes will be made immediately.
Also, my understanding is that EQT Partners is not a typical Private Equity where they will “flip” a company, they tend to hold that company and grow that company.John Schlemmer – JAAS Systems
I agree that Acumatica and IFS are cross-pollinating as stated by Mr Bridgwater’s Forbes article. I’m excited that Acumatica will continue with their team, and that their conjoining forces with IFS will give both organizations more resources and expertise to reach a broader and deeper global market penetration.
Since growing is capital intensive, I’m expecting EQT Partners to play a critical funding role. As an Acumatica ISV, I’m even more excited with the opportunity of supporting the cross-pollination and its resulting bigger and fast growing market!Joni Girardi – DataSelf
I was in partners FY 2020 strategic planning meetings in Calgary (we are merging in with the largest Canadian professional services firm MNP
I think this is a tremendous coup for EQT partners to combine IFS and Acumatica in to a single entity. There are tremendous synergies between the two products in terms of providing a continuum of functionality from small businesses to scale-up businesses (where IFS wouldn’t have traditionally played) right on to large Enterprises (where Acumatica wouldn’t have traditionally played).
There is opportunity to share technology, vertical expertise – especially in the field services and enterprise asset management areas. Overall the synergies are a good news for customers, partners and ISVs. This truly provides a lift to the entire Eco-system.Kerry Mann – Mantralogix
Acumatica earned a solid place in the visionary quadrant prior to the acquisition. Now imagine that same assessment in a year, in three years? With increased resources, delivery is going to align more with the company’s vision which naturally outpaced everyone given its magnitude. Expect disruption within the mid market ERP space at levels unseen for decades.Matthew Butler – Acucode
I was sitting at my computer when I received an e-mail from Geoff Ashly a day before the announcement because I am part of the practice owners forum. As an owner, I immediately started stacking up pros and cons.
Pros – Single owner, with deep pockets and with Global ERP experience.
Cons – May dilute and distract Acumatica development talent as they share and normalize technology between IFS and Acumatica.Michael Milligan – AccuNet
One of my favorite Jon Roskill themes is punching above your weight – whether that’s Acumatica taking on Microsoft and Oracle, or small businesses using the Acumatica platform to take on similarly formidable competitors. With EQT’s money and IFS’s reach, it’s going to be fun to see Jon’s punch now!Michael Nottoli – DSD Business Systems (Milwaukee)
In August 2018 I was at the Practice Owner meeting in Dallas with the management team from Acumatica. Jon Roskill gave a presentation and asked for questions. It was quiet, so I asked, “I love what you’re doing, Acumatica has been a home run for us. But if I had one concern, it is that you look like a prime acquisition target, and after my recent experience, that scares me.”
Jon replied, “Mike, I’d be lying if I didn’t say everything is for sale. But that is not what we are working toward. We are working towards growing to the point of going public.” Obviously that was the right answer, anything else would have been dishonest.
Fast forward to last week when I got the call from Geoff Ashley. As I told Geoff, if an acquisition was to happen, in my opinion, a deep pocket VC group, with a big brother product that won’t just roll up users is the absolute best outcome in my opinion. That the VC and NOT IFS did the acquisition was a very good sign for me, made me feel like Acumatica was strategic, not just more customers and technology. On top of that, as the management has been nothing but open and honest (ala Jon’s comments in Dallas), I put my faith in them that going to market with a strong product and a channel will continue to be their approach.Michael Oswalt – Algorithm
As a long-time ISV Partner with Acumatica, IBSRE has watched with interest the growth and success of the company. While excited about the opportunity this provided us, in today’s cloud environment, concern about who would acquire Acumatica was lurking on the outskirts of the radar.
This transaction is the best of both worlds. Acumatica remains its own business unit while being able to leverage resources of a larger ERP provider. Both entities bring unique perspective to the table and should be able to provide value to each other. IFS has deep ERP functional knowledge that will increase the depth of the Acumatica feature list. While Acumatica’s unparalleled UX design can improve IFS’s ability to quickly deploy and implement complex systems.
IBSRE is excited about the possibilities ahead as these two companies “tap into one another’s ISV, reseller and systems integrator communities, cross-pollinate technical resources and roadmaps, and implement best practices across services and support to enable efficiencies of scale and rapid growth that are mutually beneficial.” Let’s go!Mike Mullin – Integrated Business Systems
We are excited about the EQT acquisition news and the opportunities that combining forces between Acumatica and IFS will bring. We already have a very strong partnership with Acumatica because our businesses are a natural fit – we both offer leading-edge technology, best in class functionality, and customer-friendly business practices.
The press release states “the two companies will tap into one another’s ISV, reseller and systems integrator communities, cross-pollinate technical resources and roadmaps, and implement best practices across services and support to enable efficiencies of scale and rapid growth that are mutually beneficial.”
These changes should deliver an even better offering for APS Payments channel partners, and we can only expect greater opportunity growth for our integrated payment processing solution within the Acumatica channel in the future!Phillip Heath – APS Payments
I heard the news as I landed in Vermont from Austin where Kensium just became a BigCommerce Elite Partner: https://www.kensiumsolutions.com/blog/kensium-becomes-a-bigcommerce-agency-partner
I feel very positive about the news – This just confirms that we were right in partnering with Acumatica 6 years ago. As a VAR, one of the toughest questions that we come across when competing against other solutions is regarding the financial stability of the company. This acquisition by EQT will make it much easier to answer those questions. As an ISV, we have already started looking at opportunities this merger brings to our organization – expanding our eCommerce solutions to the larger sister company, IFS.Rahul Gedupudi – Kensium
I was on vacation with my family at the beach when I heard the news. Coincidentally enough I had spent most of my mornings during the week reflecting on and planning for our firm’s investment in Acumatica. The channel must look at these inevitable acquisitions through a different lens than the one we used during the perpetual software license days. Under the subscription model, a channel partner is truly investing time, money and resources today for a revenue stream tomorrow. Any change in ownership, if not properly managed, can upset the willingness of the partner channel to invest at the same level.
That being said, this acquisition may be the best outcome we can hope for when we think rationally and realistically about the software publishers we represent. This is their exit strategy, hoping for an IPO is usually unreasonable. Being acquired by a forward thinking firm like EQT potentially has a big upside.
From the VAR’s perspective, we can only hope that EQT gives proper recognition to the channel AND the publisher for the incredible growth rate Acumatica has experienced. Unfortunately, our company has been involved in these types of acquisitions where the acquiring company assumes the same growth rate can be achieved with a diluted and/or marginally compensated channel. In both instances, the growth rate dropped dramatically after the purchase due to channel conflict and confusion.
From the client and/or prospective clients perspective, this is a nominal change at worst with the upside of larger investment dollars bringing a continually improved product to market even faster.
At Strategies Group, we are bullish on the future with Acumatica and EQT and plan to work with the new ownership to continue making Acumatica the most advanced software platform for our clients to invest in for the next 20 years of their business.Randy Collins – Strategies Group
I was wrapping up my breakfast when Fernando – my partner and brother – texted the news to me. All in all, I think the reasons for partners to be optimistic about this move outweigh the natural fears everyone has when dealing with M&A’s.
And then again, this isn’t your typical merger anyway. For the time being, we know that Acumatica’s C-suite will remain in place, that they will continue to grow their staff – hopefully still favoring product and development roles, which has been instrumental to Acumatica’s growth so far – and there will be no rebranding.
We should all feel – even without being shareholders – a sense of validation of our collective bet on Acumatica, for we all have certainly invested money, countless hours and sweat in making this community grow. Let’s trust Acumatica’s leadership to keep up the open communication they’ve gotten us used to, be able to get the best from this deal, and put the dollar influx they will receive to great use in marketing and product development.
As for what opportunities open up for Acumatica partners through the IFS alliance, we’ll have to wait a little to see how they are framed and how we can leverage them. Seeing how everyone involved in this deal acknowledged Acumatica’s channel-only model as a key differentiator, we should expect Acumatica to continue to keep the channel’s best interest in mind.Ricardo Amadoz – SkyKnack
You can be sure that competitors will spin the transaction as a negative and spread as much FUD as possible. In fact, it’s already begun. But, from our perspective as a strategic ISV Partner for Acumatica, we see nothing but positives: more resources, more opportunities, more growth.Russ Graf – NetStock
I was drinking my morning coffee when I saw an email in my inbox from an Acumatica exec who wanted to discuss. It was nice to be close enough to our partner that they would reach out early to talk about the acquisition and how that might impact us, them and the channel.Russ Harper – NexTec
Aktion Associates, a top reseller partner for Acumatica with a U.S. geographic coverage footprint, has anticipated an impending sale for some time. The announcement came with little surprise, as there was speculation that the original investors had been involved for an expanded period of time. We are happy for the founders and early investors that brought the Acumatica product to market and built one of the strongest channels in the ERP SMB market place.
Acumatica’s vertical market focus, annual new customer acquisition wins, and superior sales and service capacity channel has them extremely well positioned to achieve significant cloud market share.
We are encouraged to be paired with IFS as a sister company in the investment fund grouping. There is a nice opportunity to create synergy between those (2) separate companies that will benefit both organizations.
With Jon Roskill at the helm and continuing to lead the Acumatica team, we are very encouraged with our channel opportunity moving forward.Scott E. Irwin – Aktion Associates, Inc.
I am pretty excited by the news of Acumatica’s Acquisition by EQT.
I have seen some concern expressed by a few people in the VAR community. However, most of those don’t have direct experience within the Acumatica channel. Others appear to equate the purchase with past acquisitions of other ERP systems by ERP aggregators and consolidators, some of which have not always worked well.
In the case of Acumatica and EQT, I think this is more like the transaction with Accel-KKR back in June of 2018. As an active Acumatica partner, I can tell you that Acumatica made great use of those investments! They showed up quickly in the form of huge strides in product development and improvements in the two versions released after the transaction.Shawn Slavin – CS3 Technology