APM Update: Private Equity gives IFS a Boost and Schneider Electric Shows Breadth [Monday Musings]

Posted by Matthew Littlefield on Mon, Nov 07, 2016

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Smart Connected Enterprise The #MondayMusings, Digital Transformation blog series provides executive level insight and analysis from the previous week’s briefings, events, and publications @LNSResearch.

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The Asset Performance Management (APM) team has been busy as of late. Jason Kasper and Dan Miklovic have been to conferences from Schneider Electric, Emerson, and IFS in the last two week. Andrew Hughes even jumped into the action by attending a Honeywell conference. In this week’s Monday Musings we will cover updates from two EAM providers that both go broader than just EAM in different ways.

PE Buyouts of Software Companies Can Be a Good Thing

Last week, Dan Miklovic flew to Sweden for the 2016 IFS user conference. In my discussions with him about the event, he shared some of his insights on the software industry and the impact of Private Equity (PE) over the past few decades.

According to Dan, the software industry has always been an attractive space to PE firms. Many times a software company’s founders decide it is time to retire or move to their next challenge. If no suitors emerge from within the industry, usually larger firms looking for functionality, industry expertise or geographic presence; another option is the PE route. Sometimes this does not work out all that well for the existing clients since the PE firms might just start consolidating a bunch of companies into a holding company that exists to harvest the cash flow from service contracts. Other times the PE firm might just make some small investments to pump up the receivables sheet or fill the order book so they can resell for a profit.

In other cases though, the PE firm is a nurturing investor that brings new ideas, capital investment and leadership or oversight shooting for longer term growth and appreciation. An example of this approach was made evident at the 2016 IFS World Congress held in Gothenburg Sweden during October. This year, PE firm EQT finished their acquisition of ERP/EAM provider IFS and the event was the first-time users and the analyst community could gain some real insight into how EQT will treat IFS.

To see Dan’s full analysis of IFS and the EQT investment, see our Vendor Spotlight where we highlight why we believe the EQT investment will pay off for existing and future IFS clients.

Schneider Electric shows Breadth in APM Portfolio

Several weeks ago Dan and Jason both travelled to the Schneider Electric Maximize Return on Assets event in Chicago.

In discussions with Jason, he gave Schneider Electric high marks for a conference that engaged users across a software portfolio that has been built through acquisition and covers a very broad range of APM capabilities. Jason also gave the company credit for building Industrial Internet of Things (IIoT) and Big Data into the APM story.

Schneider Electric has many of the components for a broad APM portfolio offering, something not too many others in the APM landscape can say. What they will need to show is how these pieces will fit together in a broader industry context. This is the direction they intend to go, offering an APM platform. This can help customers understand the value proposition of all the APM elements offered by Schneider Electric. This should make it easier to communicate their broad offering to the industries they cover. This is a good direction as it will be hard to maintain momentum with the pieces separated.  Schneider Electric is quickly evolving its technology platform approach to bring everything together with an understanding that IIoT capabilities will influence buying decisions moving forward. 

To read Jason’s full report, please see the vendor spotlight.

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Categories: Enterprise Resource Planning (ERP), Industrial Internet of Things (IIoT), Enterprise Asset Management (EAM), Industrial Transformation / Digital Transformation, #MondayMusings, Asset Performance Management (APM)