SSA Global acquires Provia

Acquisition makes SSA third largest provider of supply chain execution software amid extensive industry consolidation.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 4/1/2006

SSA Global Technologies, one of the largest ERP providers, surprised the supply chain execution market when it announced the acquisition of Provia Software, one of the leading best-of-breed providers of warehouse management (WMS) and supply chain execution solutions.

The deal strengthens SSA's position as a best-of-breed provider of WMS solutions, a space the company entered in late 2003 when it acquired EXE Technologies. While SSA declines to provide revenues for its WMS business, by some estimates it is now the third largest provider of warehouse management solutions behind Manhattan Associates and RedPrairie.

"Provia has a strong presence in the 3PL (third-party logistics provider) industry, which will expand our market presence there," says Cory Eaves, SSA's chief technology officer. "They also have a packaged solution with a very low cost of ownership for the small-to-mid-sized business market, which will allow us to address that market."

The deal also continues the consolidation of WMS suppliers. "If you look back five years, there were several mid-size, best-of-breed WMS suppliers," says Steve Banker, service director for supply chain management at the ARC Advisory Group. "Those companies have largely disappeared."

That might be an understatement. Modern's list of the top 25 WMS suppliers for 2001 featured 13 companies that have been acquired or left the WMS business altogether, including EXE Technologies and Provia, Vertex Interactive, LIS, MARC Global Systems, HighJump Software, Delfour Corp., V3 Systems, Optum, Yantra, Radcliffe Systems and Ann Arbor Computer.

In fact, Catalyst International may be the only mid-size, best-of-breed WMS supplier to remain as a stand-alone company.

When he looks at the current lineup of suppliers, Banker sees several trends at work. "RedPrairie and Manhattan Associates, the biggest of the best-of-breed providers, have gotten bigger, partially through acquisitions," says Banker. "Meanwhile, more and more ERP suppliers like SSA Global, Oracle and SAP are offering WMS solutions, but many of them have yet to garner much in the way of revenues from these solutions."

Finally, Banker is also tracking the emergence of a new breed of provider to service the smallest companies that have largely been ignored by WMS vendors in the past. That new model has yet to prove itself, says Banker. "They're selling many units, but because of price points, they're not generating much in the way of revenues," he says.

SSA Global is banking on acquisitions such as Provia's to strengthen its business. "If you're an existing Provia customer, we'll continue to sell and maintain their solution while bringing in some of the products we sell, like voice-directed systems and best-in-class transportation," says Eaves. "In each of the 12 acquisitions we've done, our customer retention has gone up. But at the end of the day, the customer will be the judge on how well we're doing."