ALKHOBAR: Software AG, the world’s largest independent provider of business infrastructure software has launched a merger with IDS Scheer, a market leader in Business Process Management (BPM) software, solutions and services for corporations and public organizations worldwide. The purchase price of the entire IDS Scheer share capital is approximately 487 million euros.
The transaction will create a global producer of infrastructure software and Business Process Management software, with more than 6,000 employees and more than one billion euros in revenue. Software AG’s strengths, such as technology leadership in middleware software, financial strength and a global presence will complement IDS Scheer’s strengths of the modeling, implementation and controlling of business processes, a strong partner network and a large service presence in their approximate 7,500 customer base. IDS Scheer also offers extensive industry expertise and direct access to vertical markets and a well-established presence in the SAP consulting business.
“The proposed merger will provide Software AG a sustainable and strengthened competitive position in rapidly consolidating global software market,” said Marco Gerazounis, senior vice president, Software AG, Middle East and Eastern Europe. “It also gives us the advantage of fortifying our presence in key potential growth markets, such as the Middle East. Moreover, the powerful combination of the two successful business models will allow Software AG to offer added value to our clients. We are now preparing to accommodate an increase in customer base to maintain and strengthen our leadership in the BPM sector.”
This merger should be a boon to Saudi businesses because it will create new competition in the SAP space. Enterprise customers will be able to turn to SAP or Software AG for integration of SAP solutions including web-based IT systems and support services. Software AG also hopes to benefit from increased visibility and influence in the growing market for BPM technology. BPM systems manage person-to-person, system-to-system and combination workflows. BPM offers organizations flexibility in executing and monitoring automated workflows, while reducing cost and risk.
How well Software AG will capitalize on the new business opportunities remains to be seen. The company is late to make a strong play for the Saudi market. SAP has had a presence in the Kingdom for more than 15 years. However the appetite for BPM is growing and local organizations may be willing to at least investigate new options.
“There is a lot of interest in the market around Software AG’s offerings,” remarked Gerazounis. “We believe that the market share that we currently hold in this region is much lower than it should be and we are really seeing more of a demand here in Saudi Arabia than elsewhere.”
In the Middle East, Software AG plans to focus on the telecommunications, government, energy and financial services sectors. Gerazounis stated that the strategic intent of Software AG is to double the company’s market share in the Middle East and Saudi Arabia is expected to provide the largest portion of that growth. He commented that his presence in Bahrain is just one indication of the importance of the Middle East to Software AG and he claims that the company is already gaining traction.
“What we are finding is that when we are going into organizations which are either considering SAP or using SAP, we offer a far more effective means of solving business problems. By that what I mean is that we find that it takes a lot less time and a lot less effort to deliver the same solution by using Software AG rather than SAP,” he explained.
Gerazounis added that while Software AG certainly supports best practices and regulatory compliance, the company believes that there is no out of the box solution that serves every organization. There can even be organizational resistance in approaching an enterprise with an off the shelf application and insisting that its implementation will be the best way to solve a problem or automate a process.
“The way we approach customers’ problems is slightly different than SAP and the other big vendors in the sense that we look at the problem from the customer’s perspective. Instead of taking an already developed application, we employ a fundamental set of tools which we then use to define and build the solution required by the customer,” he said. “We do bring in expertise and we’ve seen that this international know-how is used extensively by our regional customers. But we don’t have a pre-determined plan telling customers, ‘This is the way you have to work.’ We would rather take a slightly different approach in terms of creating the end application by looking at what works best for the customer and then using our people and our templates to bring in the needed expertise. We can then say to the customer, “This is how you could improve it and this is how it would work better.’”
There is no magic in implementations either. Gerazounis advised that enterprises and their solution providers have to realize that automation is a process, an evolution. While it brings certain improvements and benefits in the short term, streamlining and measuring the automated process over time often adds further value to the client.
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