IFS on buying spree

The European-based business application vendor this week made a slew of acquisitions and investments as it prepares to expand into new technological and regional markets.

IFS, a maker of software that automates internal business functions, this week bought the controlling interest in Exactium, a partner of IFS that makes product configuration software.

But the Swedish-based ERP vendor didn't stop there. IFS also bought German ERP software maker GSB and Swedish firm Industridokumentation AB (IDOK), a maker of plant document management software.

"I've been impressed with IFS, they've been doing a nice job," said Jim Shepherd, analyst at AMR Research in Boston. "The configurable product market is a good solid market for IFS. They haven't had a decent configurator for a long time."

IFS and Exactium began working together earlier this year when they formed an original equipment manufacturer (OEM) relationship. IFS's Applications 99 application suite and the Exactium Mobile Sales system are now integrated. Current joint customers include the Timberjack Group and Lotus Cars.

"The sales configurator has proven to be a key differentiator in many of our sales opportunities," said Bengt Nilsson, president and chief executive of IFS. "We see this investment as an opportunity to build on this strong base and leverage the technology to further meet our customers' application needs."

Most of Atlanta-based Exactium's customers are other software vendors, particularly sales force automation firms.

Exactium will continue to operate as an independent company.

Shepherd warned that Exactium may have trouble selling its product to other ERP vendors now that IFS is the benefactor. Still, he said the sales force market should still be interested since it is not a direct competitor.

IFS is also instantly expanding its customer base by 400 on the other side of the Atlantic with the takeover of German software firm GSB. GSB has 122 employees and its 1998 sales are predicted to be about $13 million.

"This provides us with a solid foundation for continued expansion in Europe's German-speaking countries," Nilsson said. GSB "strengthens our product offering with a strong human resources [system] for the German market."

But IFS' push into Germany means butting heads with worldwide industry leader SAP on its home turf. Germany is a key European market and one in which most of the vendors are competing heavily.

"Germany in some ways is the best European market," Shepherd said. "Baan has always done well in Germany. It is an experienced, well-educated market and always an opportunity for someone other than SAP."

Nilsson added that GSB's customers will continue to be supported on their current GSB products or offered on upgrade to IFS' software. The contract is to be finalized this week.

IDOK, with offices in Atlanta, has an estimated $8.9 million in 1998 revenue.