According to CEO Mike Greenough, it is estimated that SSA’s customer base will spend $26.6bn on IT and related areas. He said it currently has annual revenue in the region of $800m, and questioned where the other $25bn-plus is going. He said if SSA only got 10% of that, it would propel the company forward. That is where we are going in the next few years, he said. You have to get better every year. Even for the best, there is room for improvement. If you are not you are slowly going out of business.

The company has achieved its current size through a deliberate strategy of making acquisitions to increase its market share, and there is no end to that strategy in sight. SSA has just tied up the acquisition of CRM analytics specialist Epiphany, its eleventh acquisition since April 2001. At any one time it keeps a watching brief on 30 to 35 companies that are possible acquisition targets.

Although it gives nothing away about who its next targets might be, struggling supply chain vendors i2 or Manugistics could conceivably be on the list. You need two things for an acquisition to happen, said EVP Graeme Cooksley. A seller who is willing to sell and a buyer who is willing to buy. While neither company has declared itself for sale, their finances indicate that it would be prudent to look for an exit strategy, and SSA might just be the one to swoop, but only if the price is right. Manugistics in particular, with its optimization focus would complement SSA’s current SCM offerings.

However, in the current consolidation climate, growth by acquisition is not as straightforward as it used to be because the cost has mushroomed. SSA has paid an average of $37,000 per customer for its 13,000 acquired customers, while when Oracle acquired Retek it paid $2m per customer, said Mr Greenough. So while acquisitions at the right price will continue, SSA is shifting its game and putting more emphasis on extended solutions as opposed to products.

[Organizations will not] throw out SAP or Oracle and put in a replacement. That is anachronistic selling by anachronistic vendors. Companies already have ERP so you have to extend the solution, said Mr Greenough, referring to sales of enterprise applications such as CRM and SCM. This is where many of SSA’s acquisitions have been focused, and sales of its extended applications rose 62% year on year and now account for 22% of total revenue. Epiphany was an example of SSA extending its solution set to meet growing customer demand for CRM as its manufacturing client base sought to understand their customers’ customers. Having identified the need, SSA decided it was quicker to buy it than to develop it.

Technology is a commodity, so solutions matter. There will be fewer, bigger, more stable suppliers. Best-of-breed will only be boutique suppliers, said Mr Greenough. He also predicted that $250m will be the break point for the smaller companies. They will not do over $250m in annual revenue. If they do, we will squash them, he said. His rationale is that if the smaller vendors demonstrate there is a market and SSA has not got the functionality, it will go out and buy it.

The company is also changing the way it deals with customers. We need to be business advisers, not just come in and sell products. We have to earn the right to be a business adviser by understanding [customer] needs and giving value through a total solution, said Mr Cooksley. You keep customers by not sunsetting products but also by giving them value and the ROI to move forward.

Practical moves to provide value include adding industry-specific people to marketing teams who will be able to use their expertise to put solutions together to address specific needs. Although SSA plans to increase its vertical market focus, it is not going down the road of building different versions for different industries because it wants to maintain the simplicity and cost-effectiveness of a single-core application, albeit within the bounds of its multiple product, multi-code base footprint. Vertical functionality is provided through optional service packs that can be tailored for specific industries.

It is also reorganizing around three geographies: the Americas, Asia-Pac and Japan, and EMEA, so it can provide a global structure with local understanding. Each region will have its own business consultants who will put together solutions according to local demand, based on collaboration with industry specialists and customers. They will also work with the services delivery team. SSA’s aim is to create one coherent supply line and minimize the risk of gaps and inconsistencies along the way.

One new area of activity is managed application services where SSA will take on responsibility for SSA applications, taking a customer’s SSA environment into its own Indian data centers. However, the company stressed that its business will be applications management, not infrastructure management.