May 24, 2006
Last week SSA Global — which acquired Epiphany in August 2005 — announced that it will be acquired by Infor. Who is Infor? Frankly, I know virtually nothing about the company. But, my colleagues that cover the ERP market tell me that this acquisition makes Infor the third largest ERP vendor behind Oracle and SAP. The company claims nearly 25,000 customers in 100 countries and focuses its efforts on the manufacturing and distribution industries.
This latest acquisition does not bode well for Epiphany’s marketing IP or for the world class brands in industries like financial services, telecom, and retail clients that currently rely on the marketing apps. When SSA acquired Epiphany, it said it planned to continue to cater to high end direct marketers and would pursue Epiphany’s roadmap for the next release (v7.0). At the time, our assessment was that the product strategy was at odds with the SSA’s own trajectory. We also expected the number crunchers that ran SSA would eventually figure this out and refocus the roadmap and positioning of the marketing applications. Infor’s acquisition of SSA Global reduces Epiphany and its customer base to an even smaller fish in a much larger – and more foreign – sea.
As an ERP vendor focused on the manufacturing and distribution industries, it’s safe to assume that Infor does not understand the needs of high volume direct marketers. Furthermore, most of the stars that remained loyal to Epiphany over the years – through good times and bad – are gone. If Infor retains Epiphany’s marketing application assets (the key products now called: Outbound Marketing and Inbound Marketing) within its product family, the products will degrade, the blue chip customers will leave, and the IP will ultimately be worthless.
There is a ray of hope. Infor is a portfolio company of Golden Gate Capital and Summit Partners. Golden Gate came to the rescue of Blue Martini Software last year when it acquired the assets and rolled it into Ecometry. Summit backs the likes of Hyperion. My point? The smart people at these firms understand a little something about marketing and analytic applications. We think Epiphany has valuable IP which includes top notch interaction management tools, well-integrated analytics, and a solid campaign management. The most positive long term scenario for all parties is to peel off the marketing applications (they’re not well integrated with the sales and service applications anyway) and establish a new marketing software company or sell them off to another buyer with a more complementary product offering and customer base.