Today, IFS announced it has completed the acquisition of Clevest, a Vancouver based software vendor that focuses on mobile workforce management for field operations in energy and utility markets. While Clevest is best known in the north American region, IFS is hoping that its solution will prove attractive to operators in other geographies and that adding Clevest will help it to retain its leadership position in field service as defined by Gartner.
Earlier in the year, Darren Roos, CEO IFS told me that Covid has accelerated the need to ensure field service agents are 'mobile-first' and that there is an urgency in eliminating redundancy in processes and especially the non-trivial and error-prone requirement to complete paper processes.
Early warning of likely weather events for example, has become critical to ensuring field service operatives have the supplies they need before customers are impacted. Such events test a company's 'moment of service' that often makes the difference between happy and grumpy customers. Clevest brings smart metering and smart networks to the IFS field service stable. That means energy and utility companies can remotely read meters, eliminating the amount of service time needed to read meters while also optimizing field operations.
In a conversation with Marne Martin, president IFS service management I learned that IFS and Clevest have both partnered and competed in the past and that Clevest is a Build Partner with SAP for field service. That's interesting because right now, we see SAP customers are more inclined to invest for quick wins, especially where there is an obvious customer-facing digital component, rather than consider long haul and expensive upgrades. Said Martin:
Utilities are looking for additional solutions and ways of handling the pain points that they still have. Clevest is at a scale that they have a lot of blue chip customers, but being part of a larger company, not only can we give them the global go to market, but we can support them more effectively where they are looking to address pain points in these utilities in the SAP ecosystem.
Martin believes that Clevest, founded 15 years ago and now having a staff of 130 with some 300 customers, mostly in north America, allows IFS to demonstrate real world capabilities that others will find hard to match. Referencing field service management Martin said:
SAP doesn't have great solutions today so you can see why Clevest is part of the offering. Salesforce trying to fill in domain expertise, gaps between Click and their partnership with ServiceMax, etc so really they are selling roadmap and in what is still aspirational. Customers need solutions today and what we're seeing, especially with some of the Click customers are things that seem years out or may never happen at all.
For years, diginomica has been asking ERP vendors to focus on providing industry specific capabilities to their core offerings. IFS is one of a few firms that are taking this requirement to heart. Over the last few years, it has made five acquisitions; Astea, WorkWave, MPLS 2017, FSM Ltd and now Clevest. All are designed to flesh out white spaces for services organizations in asset intensive industries that need digitized functions. Is this proving successful?
I'd argue yes. Last month, IFS published its Q3 FY2020 update, reporting service management license revenue growing 86% versus Q3 YTD 2019 and cloud revenue growing 59% Y-o-Y.
Being a credible alternative to Salesforce and a complementary solution for SAP customers is no bad thing, providing IFS to reach further into both mid-market and larger customers. My one caveat is that Clevest is north American focused and that market is very different from large parts of Europe where utilities tend to be centralized around handfuls of providers albeit with large numbers of contractors providing services under brands like EDF, Northern Power, Iberdrola and others. It's not easy to see how IFS, even with its expanded portfolio of field service solutions can make a significant dent in those larger accounts although according to Martin there is a presence, albeit relatively limited in Europe. We have to assume that IFS will use its existing presence, especially in the Nordics, to drive expansion.