• April 16, 2003
  • By David Myron, Editorial Director, CRM and Speech Technology magazines and SmartCustomerService.com

Baan for Sale

After acquiring Baan in August 2000, Invensys is looking to sell the much stronger business unit, Baan executives announced yesterday. While battling with financial troubles prior to the acquisition, Baan has had a series of successful quarters. Under the Invensys roof, Baan has performed as well as and at times better than the rest of the software industry, Baan executives say. "We made our targets that we put in for the year. We tracked with the software industry as a whole," says Ed Daihl, president of Baan's Strategic Business Unit. Since the acquisition, Baan has undergone significant organizational restructuring, which included management changes and staff size reductions of approximately 30 percent. The result has yielded a stronger and leaner company with more products, such as product lifecycle management (PLM) solutions, and better integration between supply chain management and CRM efforts, Daihl says. If Baan is doing so well in getting its house in order then why is Invensys looking to sell? John Bermudez, a senior vice president of research at AMR Research, who recently spoke with Laurens van der Tang, president of Baan, says, "Baan is doing fine, but considering the current economic climate, Invensys wants to pare down to things it understands." In an email alert called AMR Newswire, sent earlier today, Bermudez and analyst Randy Weston, wrote that Invensys is aiming to "strip down to its bare essentials. Invensys is clearing out nearly 70 percent of the business it has built the past few years to concentrate solely on its production management in the process industries." "We focus on discrete manufacturing. Everything Invensys focuses on is the process industry. Baan is not a process company," Daihl says. Daihl says he has been talking to four different vendors interested in acquiring Baan and its more than 6,000 customers. While Daihl could not comment on which companies he's talking with he says, "The people who are talking to us are good quality players, and are not here to bottom fish." In the AMR Newswire
, Bermudez speculates that some of those "players" might include SSA Technologies, PeopleSoft, or a venture-funded group interested in taking Baan private. The deal will be all or nothing. Baan and its pieces, including the CAPS Logistics supply chain products, the CRM system, and the PLM products, as well as Baan's field organization, which was never merged into Invensys, will all be sold together, Daihl affirms. What kind of affect might this have on customers? According to Bermudez and Weston, not much. "Life will go on, just as it did when Invensys bought Baan. Baan is a solid product and a valuable property; no matter who gets it, it will still be taken seriously and not bled dry of declining maintenance revenue until it can be shut down," they stated in the AMR Newswire. As for what Baan executives are advising current customers looking to upgrade their Baan solutions or potential customers considering a Baan solution for the first time, Daihl advises, "Stay the course. Go ahead and make the purchase. They're only going to get better in the future."
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