EFI sets sights on global MIS takeover
Monday, November 23, 2015
It’s probably safe to assume that $790m (£515m)-turnover US company EFI has been after another UK MIS scalp for some time. Since acquiring compatriot Printcafe in 2003, itself a keen consolidator in the market in prior years, California-headquartered EFI has bought a further 13 MIS companies, in the US, Australia, Brazil, Germany, France and the Netherlands. It acquire the UK’s Technique three years ago, and has now swooped for Shuttleworth.
Joint managing director Andy King told PrintWeek a previous approach had failed, saying “in the past we wouldn’t have been comfortable with the strategy that was being discussed for post-acquisition,” but things were different now.
EFI says it is the fastest-growing print MIS/ERP provider in Europe in terms of market share. In 2014, it had approximately 70% market share in North America for print MIS. The UK is the most mature MIS market and £4m-turnover Shuttleworth’s main competitors also have an international presence. So it might be imagined EFI is pleased indeed. However, Shuttleworth customers are likely to be twitchy.
“There’s a general uneasiness when people buy any technology that may be subject to aggressive acquisition. People are going to be worried that their existing products will be shut down and that there won’t be a practical migration path that doesn’t involve a significant investment of time and money,” says Tharstern managing director Keith McMurtrie.
One industry watcher agrees, saying Shuttleworth customers will be concerned EFI may in future continue to support but freeze products, while offering cross-grades to another EFI platform. He says: “EFI is definitely in the process of extending a dominant position in the MIS market, although my hunch is that its primary strategy is buying turnover in a scramble to reach its self-imposed $1bn business aim.”
EFI’s director of productivity software for EFI in EMEA, Steffen Haaga, says consolidation is not the aim. “We have 15 MIS in different territories. We want to keep them going as long as we can. Some, like Prism, have stopped but if you have a couple of hundred customers using the system, and they are happy with it, it would be stupid to stop it.”
Perhaps cognisant of the backlash from Australian customers after EFI revealed its intention to archive Prism following Prism’s acquisition in 2011, EFI’s first step is integration and consultation.
“Shuttleworth is one of the big players in the UK and gives us a good platform in allowing us to grow our business further. We have been working in the last two weeks to integrate Fiery front-end into the Shuttleworth MIS. That’s the highest priority. We’re talking to engineering at Shuttleworth to see what else can be integrated,” Haaga says.
EFI aims to cut down manual processes for printers, including the 1.8 million Fiery users worldwide, and last Thursday held a user day for Shuttleworth customers at the company’s base in Kettering, Northamptonshire, where it discussed what other integrations, for example W2P, scheduling or data collection, would be of benefit.
“One of our biggest strengths is we can have focused teams around different components and we can always choose the best components to roll out to other MIS,” Haaga adds.
“We can use these tools, which help the customer’s business to be more efficient, and the Shuttleworth team can focus more on the development of the core MIS.”
This programme of integration is controversial. One industry expert says: “If EFI systems were open all would be fine but they are almost trying to create a proprietary environment where everything links so long as it has an EFI badge. If there is already an integration then that integration will stay but they won’t integrate to anyone new.”
But EFI says that integration of EFI products does not mean customers can’t integrate with competitor software. They can choose to use JDF kits to develop their own integrations while some products also have APIs (application program interfaces) that can be used to develop custom integrations between EFI and non-EFI systems.
Nevertheless independent MIS developers see their freedom as a key selling point.
Nicola Bisset, managing director of Optimus, says “I think the reason we continue to flourish is because we are owner managed, we are smaller and we are focused on what we do, which is a very niche area. We only do MIS. We have a very consultative approach and we’re treated as a partner rather than a supplier.
“We have always ensured that our systems are built with a completely open architecture so we can integrate with multiple systems that sit outside of the MIS ensuring that customers can have maximum choice.
“Everything has to be customer-driven. We recently integrated with Xerox XMPie because that’s what the market wants.”
McMurtrie adds that competition keeps the sector healthy as developers have to offer the best products.
“That’s certainly what we’re doing with our MIS. The US market seems particularly welcoming to independent MIS suppliers who work with other best of breed vendors without the complication of those suppliers being in competition with each other. We’ve had significant interest already and we’re very excited about our future in the US.”
Meanwhile, team Shuttleworth will continue to operate from Kettering, Northamptonshire. EFI’s whole productivity software division is now run from the headquarters of its most significant MIS acquisition, Printcafe, in Pittsburgh.
Ultimately, Haaga says, the technology it acquires in an MIS company takeover is of less value than the talent that comes with it.
“One of the biggest issues we have is finding experienced people to grow our business. What’s really important is that they have knowledgeable and expert people in MIS. It’s really difficult to find people in the market who understand MIS because it’s really broad, it takes in estimating, sales, accounting, warehousing. It’s a stretch to find people like that. Technology is easier to buy, people are more important. We can develop a system but we can’t grow our own people fast enough.”
EFI’s MIS acquisitions
2015 Shuttleworth (UK)
2014 DiMS! (Netherlands); Group Rhapso (France)
2013 GamSys Software (France); Lector Computersysteme (Germany); Printleader (US)
2012 Metrics Sistemas de Informação (Brazil), Technique (UK)
2011 Alphagraph (Germany); Prism Group Holdings (Australia); Streamline Development (US)
2010 Radius Solutions (US)
2008 Pace Systems Group (US)
2003 Printcafe (US)