SSA Global To Buy Epiphany

Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 11-Aug-2005 08:46 AM

So the consolidation continues in the CRM industry, much as is happening throughout the business world. SSA Global has announced plans to buy Epiphany in a deal estimated at $329 million.

What do you think of the deal? What does this mean for CRM?

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 11-Aug-2005 09:29 AM

[Posted for Michael Lowenstein]

In part because there is relatively modest dovetailing of ePiphany's architecture into SSA's, it wouldn't be surprising to see the SSA purchase of ePiphany follow the same track as Oracle's more publicized purchase of PeopleSoft, namely that virtually all traces of the acquiree will disappear without leaving so much as a shadow.

Anyone who's followed ePiphany has witnessed them bleeding red ink for years, so this continues the trend of CRM supplier consolidation which has been with us for some time.

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 11-Aug-2005 11:05 AM

[Posted for Dick Lee]

E.piphany overreached trying to migrate from its marketing analytics base into a full CRM suite. Plus, it wound up migrating into pretty barren sales territory, just as Siebel's sales went south. So—no surprise.

Dick Lee
High-Yield Methods
dlee@h-ym.com

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 11-Aug-2005 03:54 PM

[Posted for Naras Eechambadi]

The Epiphany sale closes a curtain on a pioneer in Marketing Automation.

With SSA Global's recent announcement that it would buy E.piphany (EPNY) for $329 million (really $163 million, since Epiphany has $166 million in cash), the curtain came down on a storied pioneer in the marketing automation space.

SSA specializes in ERP software, and it will be interesting to see if it can, in fact, leverage the supposed synergies with Epiphany's CRM related offerings. If past experience with such acquisitions is anything to go by, Epiphany's products will sink without a trace in the marketplace, its customers will eventually migrate to competitors over the next few years and SSA's shareholders will be a little poorer for the experience.

Epiphany's tale epitomizes how short term success and the resulting hubris can doom companies in the long term.

When it started out in the late '90s, Epiphany successfully tapped into the marketing zeitgeist. Direct and online marketers were desperately ready for a tool that would simplify the process of gathering customer data; analyze it easily; run sophisticated, targeted marketing campaigns; and track them. The competition sold campaign management tools, data marts, reporting and analytic tools a la carte with complex integration requirements and uncertain timelines. Epiphany promised a boxed solution that brought all of this together with an implementation methodology that was well defined, both in terms of cost and time.

This was and could have been a great business. Unfortunately, the company went public during the height of the dot com bubble, raised hundreds of millions of dollars and had a market capitalization in the billions. They even made one smart acquisition, Smart Point, a real-time analytics solution that provided Epiphany's only competitive edge in recent years. That is when the hubris set in.

It was no longer enough to be a successful marketing automation company. They had to go and fight the big boys such as Siebel and PeopleSoft in the larger enterprise CRM space—thus, the acquisitions of a call center company called Octane (for a billion dollars, no less) and some sundry sales force automation, as well as professional services firms. Of course, they took a beating from these larger players.

While they were busy integrating these software firms and dreaming of empire, smaller competitors such as Unica (which, ironically, successfully went public the same week that Epiphany was sold) went on to build very successful businesses in the marketing space, even adding features and modules, such as Marketing Resource Management, which Epiphany was forced to incorporate on an OEM basis because they were no longer capable of innovation in core marketing area.

Even when the writing was on the wall, they seemed incapable of recognizing mistakes and focusing on core strength in marketing and analytics.

The implications for the industry? This dog will not be hunting customers or prospects for much longer. If were a shareholder, I would count myself lucky, take the cash and run. If I were a customer, I would be looking at my options right now, of which there are many better ones. If I were a competitor, I would be salivating over the prospect of talking to Epiphany's current customers.

Me? I am none of those things, so I plan to go play a round. It is a nice day out here in North Carolina, far from the madness of Silicon Valley.

Naras V. Eechambadi, Ph.D.
CEO
Quaero

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 12-Aug-2005 09:27 AM

[Posted for Paul Greenberg]

SSA is clearly making a big play to go beyond ERP into the enterprise applications space. Their acquisition of Epiphany (leaving only 10 million companies calling themselves CRM) has to be seen in light of another recent acquisition they made of Boniva to strengthen so-called human capital management (ugh!) offering.

In other words, they are looking to build out missing pieces for the customer-facing and back-office applications to play in the global enterprise applications. Can they do it? Well, of course, integration issues, press releases not withstanding; cultural issues as they roll these companies up under the SSA brand; and lack of real visibility in the enterprise applications market until the recent Epiphany splash are all an upward slope they will have to climb.

Too, Epiphany wasn't exactly where it wanted to be in the marketplace when they sold to SSA. As much as I liked them, they always had a problem defining who customer targets were—partly due to leadership's history. So now comes the task of climbing that slope. Is SSA up for it? Maybe. They have the financial resources and CRM isn't much of a piece of business for them, so the risk probably isn't that high. But bigger companies than SSA have been slowed by the challenges of a series of roll-ups—especially of companies whose industry they know very little about. I'd be wary, that's for sure.

Paul Greenberg
President, The 56 Group, LLC
Chief Customer Officer, BPT Partners
Author: CRM at the Speed of Light: Essential Customer Strategies for the 21st Century, 3rd Edition

Blog: http://www.the56group.typepad.com

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 12-Aug-2005 09:29 AM

[Posted for Jim Dickie]

This is SSA Global's 10th acquisition in the past 4+ years. It rounds out product line a bit and gives them more to sell to existing customers. In terms of implications on the CRM space, I think it will be a modest impact based on past history.

Their acquisition of Baan two years ago didn't cause any shockwaves in the CRM industry, I don't see this one doing so either.

Jim Dickie
Partner, CSO Insights
www.csoinsights.com

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Gwynne Young
Managing Editor, CRMGuru.com
Member

Posted 12-Aug-2005 09:31 AM

[Posted for Bill Price]

ERP + CRM—match or miss? Often the economic buyers are different, so these mergers might not produce as much as imagined. Plus, the specter of "integration" looms.

On the other hand, Epiphany has survived several mergers (that it orchestrated), so they might know what to do to leverage the combination.

Bill Price
President & CEO, Driva Solutions
Creating and sustaining highly effective contact center strategies and solutions, locally and globally
A LimeBridge Global Alliance founding partner
http://www.drivasolutions.com http://www.limebridge.com