IFS World 2019 - Roos makes challenger pitch as Astea buy extends FSM reach

Phil Wainewright Profile picture for user pwainewright October 8, 2019
At its annual IFS World Conference in Boston, IFS positions itself on the side of challenger companies as it announces an FSM acquisition

Darren Roos at IFSWorld 19
Darren Roos, IFS ( via Phil Wainewright)

IFS, which specializes in enterprise software for asset-intensive industries, isn't in the top tier of enterprise application vendors, but CEO Darren Roos sees that as a strength. Opening the vendor's annual IFSWorld conference in Boston today, he explained the logic:

What we realized was that many of our customers weren't necessarily the number one or number two in their industry, they typically were the challengers, looking to disrupt, looking to do something different and become number one.

We realized that that was a really good description of who IFS was.

With a product range spanning enterprise resource planning (ERP), enterprise asset management (EAM), and field service management (FSM), IFS is still on its way to its first $1 billion in annual revenue, a target Roos aims to reach in 2021. That leaves it firmly in the second tier compared to industry leaders, but many customers feel this makes IFS more approachable and in tune with their interests. Selecting #forthechallengers as the tagline of this year's IFSWorld is designed to emphasize that common cause, says Roos:

There is this next tier where there is this appetite to do something differently, and that's where we're winning.

IFS buys Astea, adds to FSM heft

But first, Roos had some company news to divulge. He was able to announce on stage that IFS has just agreed the acquisition of Astea Technologies, a US-based FSM provider. First established in 1979 and publicly listed as an OTC stock since 1995, Astea has around 700 customers and 170 staff, with offices in the US, UK, Japan, Australia and the Netherlands, and R&D based in Israel. With revenues of just $27.5 million in its last financial year, Astea isn't going to make much of a dent in that $1 billion target, but once the deal closes it will add heft to IFS's customer base in FSM, growing it above the 8,000 mark, says Roos.

Like IFS, Astea is transitioning its product set and customer base from its on-premise origins to a cloud-based future. Until the deal closes, IFS won't be able to say much about its plans to integrate the two company's products. But a big part of Roos's keynote focused on leaving customers free to choose their path to the cloud, in contrast to its top-tier rivals:

Many of the legacy vendors are not focused on trust and choice. We see customers being pushed to the cloud... We don't stand for that. We can run the mission critical workloads reliably and consistently, wherever you are in the world.

Investing in customer success

Having just completed an implementation of its own software internally, another key theme at this year's show is "IFS runs IFS." It's another way of showing the vendor shares its customers' pain — and Roos is first to admit that there have been some lessons learned:

It taught us a lot about how we can make it easier for our customers to adopt our own technology.

Unless you count the Astea acquisition, there haven't been any blockbuster announcements at this year's show. The main product announcements today focused on the delivery of the previously launched Aurena user experience, which provides a browser-native desktop UI, along with a comprehensive set of open APIs that deliver the same functionality to mobile apps, chatbots, and third-party integrations. There was also mention of the delivery of practical capabilities across artificial intelligence, augmented reality, robotics and Internet of Things.

Perhaps more significant was the announcement of new service offerings designed to provide ongoing, proactive support to customers after go-live. The vendor also announced the launch of a customer community site where people can search for answers or get help from peers and product experts.

At the same time, there's been a big investment in expanding the partner ecosystem, with a doubling of the number of trained professionals in the ecosystem over the past year. IFS wants to see partners taking on a much bigger share of the implementations being done, while its own consulting staff focus more on business value engineering prior to implementation and ongoing support services after go-live.

My take

This was my first visit to an IFS event, standing in for Jon Reed who is otherwise engaged this week. Jon's influence was still present, with customers much more in evidence during the keynote and influencer briefings than in previous years, a direct response to feedback from Jon and Brian Sommer at last year's event.

Jon also set out a number of points he thought I should look out for. I'm still digesting much of the content, but the progress on training up partners and giving them much more of a role is promising. I was also pleased to see announcements around customer success enablement — often overlooked by vendors moving to the cloud.

The new UX and the underlying API infrastructure are refreshingly modern. There's even talk of moving to a microservices architecture running on Kubernetes, and moving to an 'evergreen' update cycle of delivering new functionality twice a year. This is making all the right noises, but does it span the entire product set, and how will IFS and its customers manage this across so many different deployment options?

On the whole, I like the plucky challenger messaging. I think it hits the right note for IFS customers. There's clearly still a lot of loyalty there, while the growth on the FSM side of the business contributes a sense of momentum. And the direction of both technology and services sounds about right.

But I do want to drill down on what exactly is going on under the covers in the IFS customer base. Yes, there's a significant move to the cloud going on, but a lot of it seems to be in the FSM product set, which is carrying most of the growth IFS is experiencing. If you take off the 8,000 FSM customers, that only leaves 2,000 in the core ERP and EAM customer base.

How fast are these ERP/EAM customers moving the cloud, what sort of cloud are they moving to, and how many of them are net new? If IFS really wants to make a name for itself as a challenger in the cloud ERP space, it's going to have to show traction here.

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