Enterprise firm looks for more chances to grow

By ADAM GIFFORD

Canadian enterprise software company Geac is determined to buy another major enterprise resource planning vendor to add to its growing stable of brands.

Asia Pacific managing director Graeme Riley told a user group conference in Auckland last week that the time was right for consolidation in the ERP market.

And Geac, with its history of buying financially troubled software companies, aimed to be the number one
consolidator.

Geac failed in its bids for System Software Associates and Baan.

But it was one of only three (with market leaders SAP and Oracle) of the top 40 ERP vendors to show a
profit last year.

Geac is now fifth in the ERP market, with revenue
just shy of $US1 billion ($2.4b) after acquiring the
System 21 product from British company JBA last
year.

"It's a troubled market. We see this as an opportun
ity to acquire other businesses," Mr Riley said.

Acquisitions, even of end of life technology, bring an
increase in customers and income from maintenance charges.

But Mr Riley said the strategy was no longer about milking maintenance fees, and the company had learned to its cost the futility of trying to force customers to adopt replacement systems.

Other product areas, including specialised software for libraries, real estate, banking systems and newspaper publishing, have been established as separate divisions, which can develop independently through part
nerships, acquisitions, sale or separate listing.

The main ERP division is also in the hunt for companies making point solutions which add value.

This month it bought TouchPoint, a Sydney-based start-up company. Its product, FlexEcomm, allows com
panies to web-enable their legacy systems for a starting price of about $100,000.

"It provides a web front end for all the normal customer service things like catalogue inquiries, placing orders, requesting quotes, looking at account balances, getting historical invoices - all the things you would normally do for a customer," said TouchPoint co-founder Dominic O'Hanlon, who now heads Geac's new
ecommerce section.

FlexEcomm is written in Delphi and runs on an SQL Server database on Microsoft's Windows NT or 2000
operating system. It can be adapted to other systems such as Linux or AS/400.

TouchPoint explored the idea of obtaining venture capital to help it expand, but was unhappy with the idea of giving away a controlling interest in the company.

"If we took VC money into the business, we would
have to do what they said, which would be an IPO
[initial public offering of shares]," said Mr O'Hanlon.
"But strategically, we didn't see our product being ready for IPO in a short period."

That made purchase by Geac the best way to advance the product, and the careers of its inventors.

Mr Riley said that while the initial emphasis was on giving Geac customers access to the FlexEcomm tech
nology, Geac saw it as being a product which could be sold to owners of any legacy ERP system.

Geac is having its own problems keeping up with demand. It has suspended a direct-marketing campaign in Australia for one product, because it generated 89 responses which the company had only four sales reps to
handle.

"There's nothing worse than creating an expectation and then not being able to follow it up," Mr Riley said.

The company is also introducing a new Customer Care plan to improve customer satisfaction.

Mr Riley said a survey of Geac customers found a "below average" satisfaction rating of 2.61 out of 5 last year
and 2.56 the previous year.