Earlier today, Arena PLM shared the news about acquisition of Omnify Software. Omnify Software mentioned on thier twitter account – we are happy to join forces with Arena PLM. Both companies have long history of PLM development and innovation in cloud, hosted and SaaS PLM.
Here is a passage from press release:
More than 1,000 manufacturing customers around the world use Arena to improve visibility and enhance collaboration, enabling dispersed teams to introduce innovative products rapidly and with fewer errors.
“Both Arena and Omnify share a long history of success in the PLM market with a strong customer orientation and a vision to help companies achieve their manufacturing goals,” said Arena CEO Craig Livingston. “We welcome and look forward to joining forces with Omnify’s talented and experienced staff and their customers.”
“While we have been a very profitable company for many years, we recognize the need to accelerate our growth and respond to market conditions,” said Omnify Software President Chuck Cimalore. “We evaluated numerous options with the goal of finding a partner who appreciates what we have built and shares our vision of the future. With Arena, not only will that goal be met but together, we will continue to build an industry leader that can meet the requirements of a wide range of customers.”
Press release speaks about joint development, acceleration of growth and industry experience. Arena Solutions and Omnify Software are long time competitors. Look in all online comparisons and you will find Arena Solution and Omnify Sofrware are positioning in the same segment of small to medium cloud PLM providers.
And here is industry overlap and composition based on G2 reviews.
And here is a comparison made by TEC Evaluation:
There are multiple reasons why acquisitions are happening between similar companies – money, access to new products and industry, vertical integration, sale or just buyout of competitor. So, what is behind Arena-Omnify acquisition? My hunch – money and growth. Arena Solutions was acquired by JMI Equity a year ago. Check press release here. New acquisition is the way to open non-organic growth. Here is a passage from Arena /JMI press release a year ago.
“We’re pleased to receive this investment from JMI and now have access to their expertise and industry network, which we believe will be critical to our continued growth and expansion,” said Craig Livingston, Chief Executive Officer of Arena. “This is the right time for our business to take its next step as we are in the midst of a sustained customer expansion and evolution of our industry-leading product platform. We’re excited to be working with the JMI team as their perspective and passion for our business are closely aligned with our own.”
Arena got money and expansion was at the air. Non-organic growth is the easiest way to increase value of the company and to bring more business. My hunch this is part of Arena strategy. Omnify PLM brings ~$5M revenues and expertise in multiple industries, which will fuel future growth of Arena.
The technological landscape of integration is interesting and might be complex. Arena PLM is only available as SaaS application, I can see Omnify PLM is available in three forms: (1) On-Premises Deployment; (2) SaaS/Hosted Deployment, (3) Cloud Deployment. The variety of Omnify deployment options is impressing. Still the plan of merge or integration is not clear. Will Arena absorb Omnify Technology and merge it into a single product? Will Omnify customers will be requested to move to Arena? Will Omnify sell their product exclusively on premise and open to Arena products access to their customers?
What is my conclusion? Money is an ultimate goal of any acquisition. Both companies are operating in the same territory and speaking to the same people. So, acquisition is not very much surprising. However, here is a thing. How technologies will be integrated? Or they won’t? It is interesting to see how 20 years old cloud PLM from Arena will be absorbing Omnify PLM stack. It is probably one of the first PLM industry experiments of combining two cloud-based (or hosted) products.The jury is still out. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased