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ERP vendor IFS has acquired Axios Systems, a firm that provides cloud-based enterprise service management and ITSM applications. The move positions IFS to compete with service management market leaders like ServiceNow and BMC.
Axios Systems, based in Edinburgh, Scotland, was founded in 1988 as a provider of ITSM applications. It has grown to provide enterprise service management (ESM) applications, which expand the ITSM model to support more enterprise business processes than IT, including HR, sales, CRM and marketing.
The acquisition of Axios Systems follows the March 10 launch of IFS Cloud, a platform that integrates enterprise applications including ERP, CRM, enterprise asset management and field service management (FSM). Axios applications will eventually be included in IFS Cloud, but will remain standalone for now, according to Darren Roos, CEO of IFS. The applications can be integrated through the IFS API framework.
Axios Systems' applications will help IFS, which is based in Linköping, Sweden, fill in gaps in its platform by connecting data from silos, including IFS Cloud and integrated third-party applications, and providing workflow between processes, Roos said. The added capabilities will allow both internal and external users to get support services from a single source. Terms of the deal were not disclosed.
"Enterprise service management enables an employee, partner or customer to go onto a single point where they can look for help," Roos said. "In the old days of ITSM it was about looking for help on an IT call, but now it could be a customer looking for help with a support call, it could be a partner looking for help to register a lead -- any type of internal or external workflow capability."
A positive move
The acquisition is a positive move for both companies, said Ray Wang, principal analyst and founder of Constellation Research.
Axios Systems, founded by Tasos Symeonides, is a family-run firm that has become a top U.K. software company in the U.K., Wang said. It has developed a strong presence with enterprise clients and has a good customer base in financial services, the public sector, health and life sciences, manufacturing and energy and oil. As an ERP vendor, IFS focuses on enterprise applications for five specific industry segments, some of which overlap with Axios Systems, like manufacturing, energy and oil.
"Axios Systems brings full-fledged ESM capabilities and a lot of international experience from digital workplace to core ITSM, IT operations and enterprise service management," he said. "They also have a complementary IT customer experience and service integration and management capabilities, so this makes this a very additive acquisition with lower cross-sell costs and offerings."
Taking on ServiceNow
The addition of Axios Systems provides IFS with a defendable niche versus enterprise systems competitors like SAP and Oracle, according to Predrag Jakovljevic, principal analyst at Technology Evaluation Centers. More importantly, however, it positions IFS to take on market leaders in ESM and ITSM, including ServiceNow and BMC.
The acquisition strategy is similar to how IFS approached broadening its FSM capabilities with the acquisitions of Field Service Management Ltd. and WorkWave in 2017, Astea in 2019 and Clevest in 2020, which enabled IFS to compete strongly in that market. In 2020, Gartner included IFS FSM as a leader in its 2020 Magic Quadrant for Field Service.
"This could be like what they did in FSM to compete with ClickSoftware, which is now Salesforce, and TOA Technologies, which is now Oracle," Jakovljevic said. "This looked almost impossible when they made the first FSM acquisition a while back."
IFS will likely try to integrate the Axios Systems applications with its platform to sell ESM and ITSM to its customer base, as well as its corporate sibling Acumatica, which provides cloud ERP systems for SMBs and midmarket enterprises, he said.
"It took IFS several years and several smaller acquisitions to become a leader in FSM, so they will likely have to do more than just Axios in order to beat ServiceNow," Jakovljevic said. "But for now, it's a good cross-sales opportunity."
Axios Systems has a global customer base of enterprise and midmarket customers, and the infusion of investment from IFS will make it competitive in the ESM market, according to Roos.
Darren RoosCEO, IFS
"Axios has a good track record of going against ServiceNow for deals, but it's a pretty small business that has not had a tremendous amount of funding or global footprint," he said. "Now we can bring in the funding and that footprint to a technology that has already proven it can compete with ServiceNow."
Axios Systems will retain its headquarters in Edinburgh, and the current management team will remain with the company. The name Axios Systems will eventually be retired, and the company will become IFS ESM, Roos said.
The Axios Systems applications, including its main ITSM application Assyst, will remain available as standalone products for now but will be integrated with IFS Cloud via APIs, he said.
"When a customer comes on to an Axios interface in the future it will look like IFS Cloud and processes are seamless so that it gives the impression of being a part of IFS Cloud, but Assyst will be able to be deployed as a standalone application," Roos said. "Rather than killing off Assyst and stranding their customers and making them move, we'll continue to enhance and improve Assyst, harmonize the look and feel, and integrate it into IFS Cloud."