It was just announced that insightsoftware, a leading financial reporting vendor, acquired Longview, a leading planning, consolidation, analytics, and tax vendor. Both companies have a global presence and successfully address the needs of thousands of customers. What’s behind this deal and is it good for customers of the two companies and the industry at large? Let’s dig a little deeper.
insightsoftware, backed by TA Associates, Genstar Capital, and ST6 Partners has grown largely by acquisition. Prior to this latest acquisition they already had a sizeable portfolio of products with overlapping functionality that address various aspects of performance management. The way they turn this potential weakness into a strength is through their unique go-to-market strategy. insightsoftware takes a multi-pronged approach to the market. Firstly, as some vendors who target multiple market segments do, they have a different strategy for selling to the midmarket than they do for reaching enterprise prospects. Where they are relatively unique though, is that they actually sell different products to these market segments to address the same requirements. They even take it a step further and have products that are optimized for specific ERPs. Here is what it looks like:
You might be saying to yourself what could they possibly be missing? Well, if they really want to be a major player in the performance management market they could use an enterprise-class cloud-based planning and budgeting solution, financial consolidation, and tax provisioning and reporting which is a growing area. Longview just happens to fill these gaps with Longview Plan (formerly Tidemark), Longview Close, Longview Tax, and Longview Analytics (formerly arcplan). Now the analytics piece may be one overlap too many and we’ll have to see how that plays out. Otherwise though the acquisition fills key gaps in their portfolio.
What’s in this for Longview? Unfortunately, while they had a strong product set Longview lost some momentum in the core performance management market in the past few years, although the Tax offering has continued to be successful. Longview was distracted by significant integration work as a result of the arcplan and Tidemark acquisitions as well as having to deal with senior management turnover. This acquisition can hopefully breathe new life into the Longview offerings which will benefit their customers as well as the performance market in general.
With insightsoftware’s strategy of selling different products to different market segments they may not need to do significant integration work with Longview and their existing portfolio, at least in the short-term. Common look and feel may be an area of focus though for products that may be purchased together.
As an analyst in the performance management space I have followed Longview for years and have been impressed with their products, specifically the ability to handle complexity as well as to process large data volumes with better performance than many competitors. I have only recently met with insightsoftware, but was pleasantly surprised by how well their executives understood the challenges of the Office of the CFO and what was required to address their needs. So, I am hopeful and cautiously optimistic that this will turn out well for all concerned. Well, maybe not for the salespeople who will now have an even larger product grid to analyze before they can figure out which product(s) they should be leading with. Although if this positively impacts deal size and revenues I’m sure they won’t mind in the end.