IFS expands EAM software portfolio with acquisition of Ultimo

ERP provider IFS adds a measure of enterprise asset management with its acquisition of Ultimo Software Solutions.

Ultimo’s EAM software is a SaaS aimed at mid-market companies and will complement the EAM capabilities of the enterprise platform of IFS Cloud, said Marne Martin, President of Service Management, EAM and Global Industry at IFS.

Ultimo was founded in 1988 and is based in the Netherlands. According to the company, Ultimo has 180 employees and over 2,000 customers, mainly in Europe. Terms of the transaction were not disclosed and the acquisition is expected to close in the third quarter of 2022.

Ultimo’s EAM software integrates with multiple enterprise platforms. Shortly after the announcement of the takeover, Ultimo was certified for integration with the ERP system SAP S/4HANA.

Analysts say this makes sense for IFS as it gives the company more options as the market for EAM services continues to grow.

New opportunities for SaaS EAM software

IFS prioritizes “asset-centric service,” Martin said, and there’s a growing need for EAM applications that integrate with an ERP platform like IFS Cloud, but there’s also an opportunity for point-in-time EAM software applications that are growing faster implement and have faster are return on value.

“There are some manufacturing companies that are moving to EAM for the first time and separating it from their ERP,” said Martin. “You also have organizations around the world that lack the asset intelligence they need to launch asset-centric service campaigns.”

This graphic shows the main functional areas of Enterprise Asset Management (EAM) software.
The main functions of the EAM software

Ultimo’s EAM software allows IFS to expand its offering to capture a major opportunity in the midmarket space while maintaining an enterprise platform, she said. Enterprise customers will continue to look to IFS Cloud for a comprehensive EAM strategy, but can turn to Ultimo when they need an EAM project that can be implemented in a matter of weeks or months.

“The addressable market for mid-market is very large, so we don’t need to bring Ultimo into the corporate space,” said Martin. “But opportunistically, to meet our customers’ requests from us, there may be times when we sell Ultimo instead of IFS Cloud.”

Now companies are really thinking about risk and condition-based maintenance and getting results from those assets.

Marne MartinPresident of Service Management, EAM and Global Industry, IFS

People used to think of EAM primarily as a fixed asset register to keep track of assets they invested in, Martin said. But now EAM is becoming a more valuable business function for large and medium-sized companies alike, as they increasingly need data about assets to move towards servitization and circular economy business models.

“Now companies are really thinking about risk and condition-based maintenance and getting results from those assets,” she said. “A lot of money has been invested in assets that have already been deployed, so you need to have the right information and insight to achieve the financial results and uptime that businesses need.”

Meet the EAM Software Market

According to Predrag Jakovljevic, senior industry analyst at Technology Evaluation Centers, IFS acquired Ultimo primarily for its cloud-only capabilities and EAM focus on small to medium-sized businesses.

“Ultimo deploys much faster than Tier 1 IFS Cloud EAM,” said Jakovljevic. “They’re still evaluating the features to see if they’re getting something new per se, but they definitely want to target the SMB market – probably globally over time.”

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

“In general, IFS is penetrating the lower end of the market with both EAM and FSM,” said Jakovljevic.

Those capabilities could also potentially be integrated into Acumatica, IFS’s stable mate, which offers cloud-based ERP for the midmarket and is also owned by venture capital firm EQT Partners, he said.

Bob Stallard, IDC research manager for global enterprise asset management and smart facilities, also said the Ultimo acquisition makes sense because it addresses areas that IFS Cloud’s enterprise-focused EAM capabilities don’t offer.

“Ultimate [SaaS application] is aimed at the primary asset management functions of smaller maintenance organizations that may not necessarily need to be integrated with anything other than perhaps their corporate financial package,” Stallard said.

IFS has built a strong European customer base and could penetrate the US midmarket with Ultimo’s SaaS capabilities, he said.

The market for EAM software is growing

The timing is also good as the EAM market steadily moves 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 plan to invest in SaaS EAM in the next 12 to 36 months .

“The growth in adoption of EAM systems is exploding, driven by multiple factors,” he said. “The pandemic, sustainability, cost control and asset life extension are some of the key drivers.”

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

“Vendor consolidation is continuing and offerings are becoming richer,” he said. “Companies are buying or developing the missing pieces they need to be competitive and are trying to adapt their go-to-market strategies to cater to a digital world and the realities of post-pandemic customer behavior.”

A recent report published by Vantage Market Research shows that the EAM software market is growing steadily. The global EAM market revenue for 2021 has been estimated at US$3.2 billion and is projected to grow at an annual rate of 8.5% to more than US$5.3 billion through 2028, according to the Vantage report.

According to Vantage Market Research, the two key growth drivers for the EAM software market are the increased need for cloud-based enterprise-to-business EAM applications and the increasing use of IoT platforms and devices to manage enterprise assets.

Jim O’Donnell is a TechTarget newswriter covering ERP and other enterprise applications for SearchSAP and SearchERP.

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