ServiceMax acquires Zinc - blending front-end collaboration with service execution

It’s turning out to be quite the year for SaaS field service management and execution provider, ServiceMax. The company is wasting no time after private equity firm Silver Lake bought a majority stake in the business from GE Digital back in December, using its new resources and backing to acquire the communications platform specifically designed for deskless workers, Zinc.

The companies already have quite a bit of history together, with Zinc CEO Stacey Epstein having previously worked as ServiceMax CMO for five years between 2009 and 2014. Not only this, but GE Ventures previously led an $11 million investment round in Zinc back in 2017 and then the company announced integration with ServiceMax in April 2018.

Today ServiceMax announced that it has acquired Zinc for an undisclosed sum, in order to “expand its comprehensive Service Execution Management platform with the only offering that allows customers to benefit from communications functionality tailored to meet the challenges of the service workforce”.

This acquisition makes sense for a number of reasons:

1. ServiceMax is specifically designed for field service workers to work more efficiently and to provide a better service (we’ve covered the company’s progress extensively, see here). Zinc too is specifically designed as a collaboration platform for deskless workers - or field service agents. With the already existing integration, this provides ServiceMax with an enhanced collaboration tool around its transactional services.
2. It gives ServiceMax potential customers a ‘soft landing’ for entry into its sophisticated platform. In other words, new customers could get some quick wins with Zinc just by introducing real-time collaboration, leading them to then consider the broader ServiceMax platform.
3. Future blending between ServiceMax’s back-end capabilities and Zinc’s front-end communication is a big opportunity.
4. You can see how ServiceMax could introduce new AI tools using the Zinc platform as a guide for field service technicians. For example, a chatbot that asks - “Have you considered this tool to solve this problem?”.

Insight from the CEOs

I got the chance to speak with the CEOs of both ServiceMax and Zinc ahead of today’s announcement, to get better insight into the opportunities to be gained from the acquisition. Scott Berg, CEO of ServiceMax, notes that whilst the integration is already there, ServiceMax will now have the benefit of providing an easy entry point for potential new customers going forward. He explained:

“I think what’s going to be really interesting is to offer that solution as one provider - as ServiceMax. This will change quite a bit, from our ability to refer other partner solutions, to one that we can really offer Zinc to our customers in conjunction with the ServiceMax solution.

“This is a big digital transformation - to go from a paper type process, to one with a high-end, mobile, digital device in the hands of thousands of people - so Zinc could serve as a starting point for that journey they’re going to be on.

“Picture a world where those service engineers in a company could deploy this, and the first thing they start to do is communicate in real-time, starting to build those knowledge networks. Potentially then, phase two, they start deploying some of the more transaction-led capabilities...the handling of contracts, parts, work orders, and scheduling that they get with ServiceMax.”

Zinc CEO Stacey Epstein said that the acquisition is a “big win” for the company, giving both ServiceMax and Zinc new market opportunities that they weren’t pursuing as standalone companies. For example, Epstein sees the potential of introducing artificial intelligence in the future, which will be made possible by tight integration between the two platforms. She said:

“We will still offer Zinc to all field service customers, whether they are ServiceMax customers or not. But also, this is giving ServiceMax a highly adopted mobile tool that’s used by field service technicians to innovate on. You can look to the future, with things like AI and AR, and a lot of really interesting features and capabilities that Zinc gives a great platform to speed the innovation in those areas.”

There are two key elements to the ServiceMax business. It gained early traction in the field service management market by selling to OEM manufacturers that wanted to escape the break-fix scenario of field service management and instead move to the predictive maintenance of products. This resulted in customers then using data to sell their products as services (hence, servitization).

Since then, ServiceMax has been able to branch into new markets with the launch of its Asset Service Management (ASM) product, selling to asset operators (e.g. transport companies, oil and gas) seeking more predictive solutions. Berg notes that there is also huge potential for Zinc in this ASM market too, particularly in the power sector. He said:

“Stacey and I have been comparing notes a bit and it has progressed quite quickly. There is some overlap. In terms of prospects - I can’t name names today - but particularly in the power space. Think about overlap not only with where ServiceMax is headed with asset service management, but also our influence in the systems through GE and their influence on industry. And then Zinc has some of their own interests and pursuits in that space too. So you’ve got disparate workforces, out in the power plant, spread out. Quite undigital at the moment, in terms of their work habits. So there’s quite a bit of application in that space too.”

However, for me, the biggest potential win for ServiceMax and Zinc will be how they further integrate the two platforms. We at diginomica have long highlighted the importance of bringing collaboration into the fold on enterprise transactional platforms. The possibilities of better service and more finely tuned transactions taking place are significant. Berg explained this succinctly, where he said that Zinc could serve well as a front-end piece that blurs with ServiceMax’s service execution capabilities. He said:

“One of the business benefits that we see right off the bat, which came off the reference calls we did with Zinc customers, is this idea that real-time communication has impact fairly quickly on outcomes, such as the ability to fix the first-time fix rate. Engineers able to communicate with each other in real-time, not having to leave the job site. That’s one immediate benefit.

“I think the second thing is that Zinc brings to us a very consumer-orientated style and usability on the mobile front. And the vision here is to use the context of messaging and communicating with people, to start to bridge over to in-context transactional things.

“Today we can link the communication stream with the work order. The vision here would be if two technicians were communicating about a part that they’re trying to find, and they’ve identified it, then the next logical step with ServiceMax would be, why wouldn’t the ServiceMax software begin to initiate the order or transfer of that part? I think you’ll see the leveraging of Zinc’s tremendous experience and usability at the front-end, blending over into ServiceMax and the transaction side.”

The start of things to come

As noted above, ServiceMax has wasted no time since the Silver Lake buyout to aggressively expand its presence in the market. When I asked Berg on the call if this was a sign of things to come, particularly with regards to future acquisitions, his response was unequivocal:

“Absolutely.”

Epstein also said that from her perspective, the acquisition of Zinc should indicate to the market that ServiceMax has some grand plans for growth. She said:

“I see this as ServiceMax wasting no time - the SilverLake deal just closed and ServiceMax is making moves already. This is just the first step in delivering a much broader, full service execution management suite.”

My take

It’s clear that this is a well thought through acquisition on ServiceMax’s part, with Zinc’s go-to-market approach perfectly aligned to what ServiceMax is aiming to achieve. Simple communication and collaboration in the field is an obvious need, as highlighted in the examples above. If ServiceMax and Zinc can blend the two platforms in a way that makes intuitive sense for field service agents, whereby collaborating and service execution go hand in hand, I think this makes ServiceMax even more compelling.