A Safe Comeback

DQI Bureau
New Update

On the face of it, it would seem that mergers and acquisitions are the only

way left for mid-market ERP vendors to sustain themselves in this business.

PeopleSoft acquired JD Edwards in a $1.7 billion deal, even as Oracle fought

bitterly to get controlling stakes in the company.


However, it’s Baan that has been ‘in the news’ in the merger and

acquisitions space. Ever since the exit of the Baan brothers, the company has

been trying to grapple with survival, and hope shimmered in 2000 when Invensys

acquired Baan in a $708 million deal. However, three years later, Baan has been

sold off to SSA Global for $135 million to an investment group consisting of

Cerberus Capital Management and General Atlantic Partners. The investment group

combined Baan with another of its investments, SSA Global Technologies, and Baan

is now a division of SSA Global Technologies to create a manufacturing-specific

enterprise software behemoth.


Baan Story in India
1990: Started

operations at SEEPZ, Mumbai 

R&D centre at Hyderabad 
1997: Global

Support centre at Hyderbad 
2000: Baan

India base grows to 100 plus customers. Globally acquired by Invensys


Invensys sells Baan to SSA Global

Users were surprised by SSA’s plans to acquire Baan but cautiously

optimistic that the merger could improve the product lines of both companies.

Watching closely the dogfight taking place in the ERP market, Baan is all set to

make a comeback under the new brand SSA Global.


SSA’s new strategy includes a bouquet of solutions for the Indian market–Baan

CRM, ERP, supply chain logistics and service applications, as well as its

analytical application, Cross Enterprise Analytics. The company is aiming to

distinguish itself from other large CRM vendors such as SAP and Oracle by

focusing on vertical markets it has been traditionally strong in–aerospace and

defence, and automotive and industrial manufacturing, and at the same time

deliver a message that CRM is not just a technology, but a strategy as well.

Asserted SSA Global country manager Gopal Madnani, "Since we’ve been

acquired by SSA, we’ve really focused the business and continued significant

investment in areas such as support and product development and

innovation." He added that SSA would distinguish itself by focusing on its

vertical market strengths. "Post SSA acquisition, we will continue to focus

on acquiring new customers and adding value to existing customers in these


Mike Greenough, CEO and chairman, SSA Global, said his strategy was to

acquire market share, support customers and continue to sell software licenses

to users who want to extend systems managing everything from accounting and

human resources to sales, purchase and distribution. Also, he has no

intentions to target tier-1 ERP upmarket. "We don’t intend to go to

upmarket" he said, referring to industry giants SAP AG, PeopleSoft and

Oracle Corp., which focus on selling to big corporations and government.


strategy is to acquire market share, support customers and continue

to sell software licenses. To users who want to extend systems

managing everything from accounting and human resources to sales,

purchase, and distribution"

Mike Greenough, CEO and chairman, SSA Global


While the company has formalized its CRM vision later than other major

vendors, its history in the CRM space goes back as far as its 1997 acquisition

of Aurum Software, a sales force automation firm founded in 1990. In May 2000,

Baan was acquired by London, England-based Invensys Plc, which incorporated

BaanFrontOffice products along with its Invensys CRM brand offerings. 

SSA currently supports the automotive, electronics, projects and process

industries. Now, with an expanded portfolio, it is also considering launching

the logistics, supply chain solutions and also solutions for the pharma market.

In addition, it is also exploring opportunities for financial solutions.

In the crowded mid-market ERP, SSA is riding high and aims to grow upwards of

20%. The company currently has about 150 customers for Baan solutions and about

50 for business planning and control system solutions, both now being offered as

part of the SSA Global solution portfolio. The company had 20 new ERP

installations last year and is expecting 25 new accounts this year.


With Baan’s acquisition, SSA can leverage Baan’s expertise in verticals

like manufacturing. Post acquisition, SSA Global now has the largest customer

base in manufacturing in the world. Prior to the acquisition, SSA itself

had a substantial customer base in this segment. Now, the combined solution

portfolio is available for its customers, which will providing SSA an

opportunity to add even more value to its offerings. For example, Baan’s

supply chain offerings can now be positioned to an expanded customer base.

Pre-acquisition, Invensys spent a lot of money helping Baan develop its next

generation of software and now SSA is all set to leverage it to bolster

its bottom lines. Explains Madnani, "The R&D investments made by

Baan before and after Invensys are all being realized and aggregated into IPR,

as part of SSA Global. These solutions will be offered as part of the

normal innovation cycle by SSA Global and we expect that such innovations

will yield good returns on investment for both us and our customers."

The company currently operates with 400 plus employees in India, with most of

them being located at the two development centers in Mumbai and Hyderabad. In

the next two years, as it plans to invest more in different activities in India,

the recruitment rate could go up by about 30% or so. 


"We are in the process of upgrading our development centers in Mumbai

and Hyderabad and the new recruitments will boost up the bottomlines in the

country as we are expecting a 30% growth in software industry this year in the

country," Greenough maintained.

Claiming to be the leader in the mid-market ERP segment, the company will

double its expenditure from the present $10 million as it has plans to make

India a global hub of operations, considering thaat in the next phase the thrust

will be more on outsourcing. 

Recently, Peoplesoft acquired JD Edwards and has strengthened its position in

the mid-size ERP market. Since Baan’s strength has always been mid-market, the

company plans to strengthen it more in the changed ERP market. Also, the company

hasn’t denied the fact that consolidation has already begun in this space and

in fact SSA Global itself has been one of the first aggregators. As for the mid

market, which is their core strength, the company will continue to focus on

this. Madnani says "Today, we have the largest market share of the

mid-market in India and globally and we will continue to defend this

position. There will certainly be more consolidation in this space with SSA

Global being one of the likely consolidators. Of course, we will do it when

it makes the most business sense and allows all our solutions to be positioned

in a synergistic and complementary way for our customers."


A flurry of acquisitions among high-profile ERP players has customers and

vendors mired in the fallout of a consolidation period. Industry experts expect

large-scale vendors to bolster existing products in an effort to fill the

mid-market void that these acquisitions have created in enterprise application


Doing business in today’s knowledge-driven networked economy requires more

than software that allows access to vital information across the enterprise and

Baan is all set to help enterprises gain business benefits in this scenario.

Post the SSA acquisition, the company claims that it has now become a one-stop

shop that provides all required solutions to enhance business value for its

customers. In fact, even with current ERP solutions, namely SSA Baan, it

has customer testimonials that highlight the benefit and value achieved by

customers. ERP customers can now realize even more value by using the ERP

integration backbone and deploying solutions like CRM for customer intimacy, SCM

for operational excellence, and PLM for product


Alliances and partnerships give SSA the much needed boost in its mission to

deliver world-class information solutions so as to help customers run a better

business in the industrial enterprise sector, and help them enjoy substantial

growth in profits. The company leverages partnerships and alliances in two

ways. In the services area, this happens by ensuring that partners are

vertically focused for the industry being served while in the product area it’s

by bringing to customers world-class components, for example, Cognos for

the business intelligence area.


But analysts have apprehensions over Baan’s sell-off by Invensys to SSA

Global and cast doubts over future support for the well-regarded ERP software.

SSA’s track record of development spend is not good. The company has been

contract mining–contacting users and squeezing more licenses out of existing

implementations, rather than developing new ones. 

Consolidation has started happening in the ERP space and SSA is ready for

further acquisitions to enhance its portfolio. Baan has been sold twice in the

last few years and Greenough has not ruled out further sell-off of Baan if

required and if in interest of customers.