Insight Bite: ERP Firms Collaborate in Move to the Cloud

Under the new ownership of private equity firm EQT Partners, American cloud enterprise software provider Acumatica is set to collaborate with Sweden-based ERP vendor IFS.

As sister companies, Acumatica and IFS are expected to retain their autonomy, but will benefit from access to each other’s customer bases, which include small to large buyers in both the US and Europe. The firms will also  explore various different partner projects, including combined investigations into Artificial Intelligence, machine learning, and IoT capabilities.

But aside from R&D, the principal goal of the merger according to IFS CEO Darren Roos, is to capitalise on the opportunity created by the ERP market’s move towards cloud-based software. IFS particularly is expected to benefit from the cloud expertise of Acumatica, which positions itself as a general ERP cloud provider and offers a competing service to Microsoft’s Business Cloud Offerings.

“This collaboration is great news for both organisations, our customers, partners, and employees,” said IFS CEO Darren Roos, who will now assume a position on Acumatica’s board of directors. “EQT has brought together two businesses that will enjoy the key benefits of a partnership in the growing cloud enterprise applications market. 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.”

The global ERP Software market has been forecast promising growth, much of which is expected to be driven by the move to cloud, as firms address the growing need for the integration of legacy systems with cloud-based services.

While big players such as SAP, Oracle, and Microsoft can service this with well-established cloud offerings, smaller players like IFS and Automatica have found niches competing against the big players in their own specific verticals.

This makes them very much in demand with buyers, including private equity firms like EQT, which are well-situated to unleash possible synergies between firms by enabling them to share resources while still remaining independent.

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