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Infor to buy hospitality software specialist
Softbrands snapped up by holding company.
By Chris Kanaracus, IDG news service
Published: 09:56 GMT, 15 June 09
ERP vendor Infor is set to buy rival software company Softbrands. Infor has teamed up with investment firm Golden Gate Capital to form a holding company to make the purchase - Softbrands has expertise in the hospitality industry, an area where Infor has little presence.
While not the largest in terms of dollars, estimated at around $80m, the deal is nonetheless interesting from a market perspective, analysts said.
For one thing, it flies in the face of back-channel talk from Infor's competitors that the privately held vendor was short on cash and unable to make more acquisitions, according to Forrester Research analyst Ray Wang.
In addition, SoftBrands has "anything you would need to run a hotel, spa and entertainment business," giving Infor potential new inroads into the hospitality vertical, Wang said.
In many cases, such businesses have employed a range of custom applications, according to Wang. And although the global recession has battered the hospitality industry overall, "people are looking to wring out some costs from their systems" by consolidating technologies, he said.
SoftBrands also sells the Fourth Shift ERP application, which "has a fairly extensive installed base among small and midsize manufacturing firms," said Frank Scavo, managing partner of the Irvine, California, consulting firm Strativa, on his Enterprise System Spectator blog.
Fourth Shift has a partnership with Infor's rival, SAP, wherein it provides manufacturing capabilities to customers of SAP's Business One application, Scavo added.
"Whether SAP is going to be willing to extend this relationship with Infor going forward remains to be seen," he said.
Meanwhile, SoftBrands' customers shouldn't expect major upheaval or changes from Infor's end, according to Wang.
Infor's general strategy has been to buy companies with large installed bases, make them comfortable and then begin pitching them on newer products over time, according to Wang. The vendor now has roughly $2.2 billion in revenue and some 70,000 customers.
In many instances, the acquired customer bases have had their systems in place for many years, and "aren't looking for bleeding-edge functionality overnight," Wang said.
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