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IFS expands EAM software portfolio with Ultimo acquisition

IFS' acquisition of cloud-based EAM vendor Ultimo provides it with midmarket options to add to its enterprise level platform in a growing EAM marketplace.

ERP vendor IFS is adding a measure of enterprise asset management with its acquisition of Ultimo Software Solutions.

Ultimo's EAM software is a SaaS that's aimed at midmarket companies, and will complement IFS Cloud's enterprise platform EAM capabilities, according to Marne Martin, president of service management, EAM and global industry at IFS.

Founded in 1988 and based in the Netherlands, Ultimo has 180 employees and over 2,000 customers, primarily in Europe, according to the company. Terms of the deal were not disclosed, and the acquisition is expected to close in third quarter of 2022.

Ultimo's EAM software integrates with several enterprise platforms. Shortly after the acquisition was announced, for example, Ultimo was certified for integration with the SAP S/4HANA ERP system.

Analysts said it makes sense for IFS, providing the company with more options as the market for EAM services continues to grow.

New opportunities for SaaS EAM software

IFS is prioritizing "asset-centric service," Martin said, and there are emerging needs for EAM applications that are integrated into an ERP platform like IFS Cloud, but there's also an opportunity for point EAM software applications that are faster to implement and have quicker return on value.

"There are quite a few manufacturing organizations that are moving to EAM for the first time and having it separate from their ERP," Martin said. "You also have organizations around the world that are lacking the asset intelligence they need to start asset-centric service campaigns."

This chart shows the main functional areas of enterprise asset management (EAM) software.
The main functions of EAM software

Ultimo's EAM software enables IFS to expand its offerings to meet a big opportunity in the midmarket area, while maintaining an enterprise platform, she said. Enterprise customers will continue to look to IFS Cloud for a broad EAM strategy, but can look to Ultimo if they need an EAM project that can be spun up in a matter of a few weeks or months.

"The midmarket addressable market is very large, so we don't need to take Ultimo up into the enterprise space," Martin said. "But opportunistically, to meet what our customers want from us, there may be times that we sell Ultimo rather than IFS Cloud."

Now companies are really thinking about risk and condition-based maintenance and getting outcomes from these assets.
Marne MartinPresident of service management, EAM and global industry, IFS

Previously, people have thought about EAM primarily as a fixed asset register to track assets that they have invested in, according to Martin. But now EAM is becoming a more valuable business function for large and midmarket companies alike, as they increasingly need data about assets in order to move to servitization and circular economy business models.

"Now companies are really thinking about risk and condition-based maintenance and getting outcomes from these assets," she said. "There's a lot of money that's been invested in assets that have already been deployed, so you have to have the right intelligence and insights to drive the financial outcomes and uptime outcomes that businesses need."

Meeting the market for EAM software

IFS acquired Ultimo primarily because of its pure cloud capabilities and small to midmarket EAM focus, according to Predrag Jakovljevic, principal industry analyst at Technology Evaluation Centers.

"Ultimo is much quicker to deploy than the Tier 1 IFS Cloud EAM," Jakovljevic said. "They are still evaluating the features for whether they are getting anything new per se, but they definitely want to target the SMB market -- likely globally over time."

IFS made a similar acquisition with SaaS field service management (FSM) provider WorkWave in 2017, although WorkWave subsequently separated from IFS in 2021.

"In general, IFS is getting into the lower end of the market with both EAM and FSM," Jakovljevic said.

These capabilities could also be potentially integrated into Acumatica, IFS' corporate stablemate that offers cloud-based ERP for the midmarket and is also owned by the venture capital firm EQT Partners, he said.

Bob Stallard, IDC research manager for worldwide enterprise asset management and smart facilities, also said the Ultimo acquisition makes sense because it addresses areas that are not offered by IFS Cloud's enterprise-oriented EAM capabilities.

"Ultimo's [SaaS application] is targeted at the primary asset management functions by smaller maintenance organizations who may not necessarily need to integrate with anything other than perhaps their corporate financial package," Stallard said.

IFS has picked up a strong European customer base and may be able to make inroads into the U.S. midmarket with Ultimo's SaaS capabilities, he said.

EAM software market is growing

The timing is favorable as well, as the EAM market is steadily progressing to the cloud, Stallard said. In an IDC survey, 25% of respondents said they will invest in SaaS EAM applications in the next year, and another 12% said they planned to invest in SaaS EAM in the next 12 to 36 months.

"EAM system adoption growth is exploding, brought on by several factors," he said. "The pandemic, sustainability, cost control and extending asset life are some of the primary drivers."

The EAM software market is in a transition state, Stallard continued.

"Vendor consolidation continues, and offerings are becoming more extensive," he said. "Companies are buying or developing the missing pieces they need to compete, at a rapid rate, and are attempting to adjust their go-to-market strategies to meet a digital-first world and the realities of post-pandemic client behaviors."

A recent report from Vantage Market Research indicated that the EAM software market is growing steadily. The global EAM market revenue for 2021 was valued at $3.2 billion, and is projected to grow by 8.5% annually to more than $5.3 billion by 2028, according to the Vantage report.

The two main growth drivers for the EAM software market are the increased needs for cloud-based EAM applications between businesses, and the increased use of IoT platforms and devices to manage business assets, according to Vantage Market Research.

Jim O'Donnell is a TechTarget news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.

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