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Acumatica is one of the pioneers of SaaS ERP systems. Beginning in 2008, the Acumatica cloud ERP platform has focused on midmarket enterprises, primarily in the manufacturing and distribution industries.
In June, Acumatica was acquired by EQT Partners, a global private equity firm that invests in technology companies, including enterprise ERP vendor IFS. The two companies are expected to operate independently, but they both have unique characteristics that could benefit each other's customers.
SearchERP sat down with Acumatica CEO Jon Roskill at the recent IFS World conference in Boston. Roskill, who became CEO in 2014 after spending several years at Microsoft, discusses how the companies are working on the integrations and how each provides strengths that the other lacks.
Since Acumatica was acquired by EQT Partners, how is progress going on integrating systems with IFS?
Jon Roskill: The acquisition was announced in June. For the next two months we did the work around due diligence and closing the deal, which included a regulatory review by two governments that we weren't expecting. We closed on Aug. 16. We couldn't do much until the deal was closed. We were waiting for that point [to begin integrations], but we've been going full speed since then. IFS is enterprise, Europe, direct selling. And Acumatica is midmarket, North America, channel market. But the two align on industry focus -- manufacturing, distribution, field service and construction.
How will Acumatica and IFS integrate on those industries?
Roskill: What's so interesting is that [our strengths] are the same. Acumatica launched a construction edition two years ago, three years ago it was the manufacturing edition and four years ago it was field service edition. So we're incredibly aligned from that perspective. There are a lot of things that we're going to be able to leverage. The first thing we did was have a board meeting in Sri Lanka, where IFS has 1,400 developers, and we talked about some things that we could do together. We're going to take advantage of IFS infrastructure and wherever we can leverage some of these resources they have. They have offices in 65 countries, so we're going to open a country presence inside IFS offices in places like South Africa and England before the end of this year.
Were these regions where Acumatica previously had little or no presence?
Roskill: We have partners in the UK and we run the UK out of the East Coast U.S., but it's been very expensive and difficult to open an office in London. The fact that we can now leverage a couple offices is all we really need. We expect to put some people in development, facilities and global support centers, as we get more customers that operate in different countries with different time zones. We do it today with the U.S., Eastern Europe and Asia, but it's not as robust as it needs to be as we continue to scale up, so this is an area where we can leverage things from IFS.
What can IFS get from integrating more with Acumatica?
Roskill: From their perspective, they are moving to the cloud. I think a lot of people had written them off as a kind of legacy vendor, but in fact they've been doing the engineering work for the last three years to do what it takes to get into a cloud model. They're doing substantial work on the Microsoft Azure front, and that's what their customers are looking for. Their space is more of a hybrid model -- how do you take advantage of being able to run public cloud in some countries where you don't have a big IT presence, combined with your headquarters where you have a strong IT presence.
What are the company sizes that Acumatica and IFS are targeting?
Roskill: People generally start with Acumatica at about $10 million as they outgrow something like Quickbooks. We have quite a few customers today that are over $1 billion, but I generally wouldn't encourage a billion dollar business to come on to Acumatica. There are certain cases where there are businesses that are relatively simple, but they have big scale. That's a good one to throw at Acumatica. We can scale using the cloud. We've benchmarked one million transactions a week for one customer, so we can do big workloads. But those bigger companies tend to get more complex: The supply chain gets more complex, the number of countries gets more complex. That's where you'd want to look at moving to something like IFS. However, IFS today has quite a few customers that are in the $100 to $200 million range that have been on IFS for 15 years and need to decide if it's better to move onto a platform more like Acumatica. It may not be huge numbers, but there could be dozens of companies where Acumatica might be a good fit for them as they look at the cloud. Similarly, Acumatica has customers that are going to outgrow Acumatica, and we can help them go to IFS.
How can Acumatica and IFS integrate on industry functionality?
Roskill: We're aligned on industries, but IFS's manufacturing capability includes very deep industry templates. We're relatively lightweight when you compare our manufacturing to what IFS has been doing for the last 20 years. On the flip side, we're really good at running thousands of customers in a large-scale cloud environment. They have some of their engineers working with our operations people about how to integrate, so we get the industry depth and they get the cloud expertise. Also, Acumatica's development stack is all cutting-edge development tools, but not everyone at IFS is there yet. We can talk about how we manage our development cycle, which is a place where we can share some things with IFS and make both companies better.