My old friend and colleague, Bob Ferrari, recently did a good job reporting on the news of further consolidation in the service parts management market. Specifically, the latest news is that Marlin Equity now controls a material portion of the legacy customer base through its roll-up of Servigistics and Click (including Xelus). Bob shares multiple perspectives on the news, including AMR's Bruce Richardson who suggests that the combination "will bring a stronger vertical industry presence and provides this market with a clear leader". Bob also shares the perspective from MCA Solutions, a Marlin competitor, that "customers and prospects" should "exercise caution".
But what does Bob think? Bob sides more with the MCA perspective that "customers and prospective buyers [should] tend towards caution" and he also recommends that customers "probe on levels of customer maintenance and service support, since its unclear whether this consolidation move is about purely consolidating customer maintenance revenues". Moreover, "if you are contemplating a near-term investment in service parts planning software, you should step-back and take a second look. The market landscape has clearly changed, and there is a bit more fuzziness related to composition of longer-term players."
Given Marlin's aggressive acquisition strategy in the past year, this feels much more like an SSA/Infor type of financially driven roll-up than it does a strategy to integrate best of breed players to drive new levels of product innovation. Should customers be concerned? I'd suggest they should sit back and see what happens because it's highly unlikely that Marlin would do much to rock the maintenance and subscription boat.
However, organizations just exploring the service parts arena -- and existing customers who are anxious to reevaluate their options -- should more aggressively consider the remaining best of breed vendors like MCA if a commitment to innovation and product leadership is high on their list of requirements in a solution and a solution partner. And if having the best capabilities and future innovation are not requisites, in addition to Marlin's portfolio, current SAP and Oracle users should also consider the service parts planning solutions from their ERP providers.