Servigistics and MCA Merge


Can this services behemoth stave off SAP and Oracle?


MCA was a waiting jewel. With several suitors bidding for their hand in marriage, it was only a question of time before the right offer came along. But is this the right deal for the market? And can the new entity stave off the constant gnawing of SAP and Oracle in the services market?

For those who don’t dabble in market sector/segment analysis, Service Management, now likely to be called Service Lifecycle Management (SLCM), is a stable but modest segment of the software market. Every hardware company, parts resellers as well as the many service companies that support these products, needs some type of solution sold by Servigistics. Parts planning; the logistical support required to respond rapidly to service needs; and field service support, including the knowledge management that ensures that service reps and customers understand the complex products they are dealing with are all part of this solution.

Servigistics/Marlin added MCA to their service management crown, which already includes Xelus and Click Commerce, providing an impressive asset base from which to solve most service parts problems. However, many of the assets/software features had a high level of overlap.

Service requirements are still broader than the current company footprint provides. Missing components still need to be built or acquired to provide all the business components to operate a services entity. I spoke with Mark Vigoroso, Senior Vice President, Global Marketing & Alliances and Michelle Duke, Director, Public Relations, Servigistics, and we discussed these issues.

According to Mark Vigoroso, Servigistics acquisition strategy is focused on both “broadening and deepening” the Servigistics solution. We are talking about the ultimate in service parts logistics ‘smarts’ provided by the existing assets of Servigistics, and future acquisitions that will broaden their capability to provide a full footprint for service professionals by industry. SAP and Oracle can’t do that.

Why this approach? It’s about focus. Servigistics has a very specific customer. That customer operates — day in and day out — the complex business of sustaining ongoing value for the product owner’s investment, ensuring 100% uptime of MRI machines, computer servers, aircraft, and automobiles, for example.

Technology companies may look alike from the outside, but they vary greatly in focus. Oracle and SAP are technology providers that provide a broad range of products — many of them world-class. However, their focus is not on the business owner, but on the CIO. Many best-in-class, or what ChainLink calls domain leaders, like Servigistics, on the other hand are focused on the business user — whether in sales management, supply chain or service management.

Besides the well known service parts logistics and optimization, Servigistics has structured-knowledge management software for technical service operations, product content management solutions for OEM, and dealer-based service organization components of the Service Lifecycle Management solution.

Why is this the right deal for customers and stakeholders?

Competition can be a healthy thing. But it can also destroy an industry. (The down side of cheap airfare, for example, is airline carriers that have small or no profit margins; customers nervously use their products each day, wondering if the company has short shrifted them in product maintenance which might risk their safety.) MCA and Servigistics showed up at almost every deal duking it out. And like Coke and Pepsi, the lower price often won. However the net effect was often a fire sale price for a premium, high-value product. Economically, you have to ask how long that can be sustained before product innovation and customer care are impacted. Servigistics made a strong argument for the merger due to this economic reality alone.

Stay tuned for more moves as Servigistics fulfills their SLCM vision.

To view other articles from this issue of the brief, click here.

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