The majority of enterprise resource planning users have been directly affected by heavy merger and acquisition activity in recent years, causing concerns for the ongoing desirability and stability of these products, a study released today by ERP vendor IFS North America reveals.
The study is based on a survey of more than 200 manufacturing and other executives, and the data was analyzed by Cindy Jutras of analyst firm Mint Jutras, Boston. The data indicates that the majority of respondents, 54 percent, say they are running ERP or other enterprise software from a software vendor that has been recently acquired. Among respondents with companies running products affected by M&A activity, 90 percent indicated that they had concerns over negative effects their business could realize of the products they were running. Concerns that the enterprise software product their company is running could be discontinued by the vendor that acquired it, or the new owner may not continue to invest in the enterprise software product going forward, were the most frequently reported concerns.
Most of these respondents - 31 percent - said they were already running their enterprise software when their software vendor was acquired, while 23 percent had selected an enterprise software product after the vendor had been subject to M&A activity. Acquired products were not necessarily viewed unfavorably by respondents as a whole, in part because when a small or struggling software vendor is acquired by a larger one, it may be viewed as a way for the vendor's products to continue into the future. In some cases, when a vendor acquires enterprise software products that are complementary or can extend their current offering, customers may actually benefit.
"We found this study interesting as it reinforces IFS's global acquisition strategy, as well as our devotion to a single enterprise software product with a solid road map for future development," IFS North America President and CEO Cindy Jaudon said. "Our strategy has been to offer a single product that is our only focus for research and development efforts."
