I have long wondered when corporations, especially conglomerates, would become enterprise software/service providers in their own right. The track record is patchy. You see financial service companies like Bank of America and Fidelity offer payroll and benefits support. You see vertical investments – Siemens with PLM and CAD, ABB with Mincom. You see auto companies cross license plenty of technology. But in many cases these services become invisible – a small part of the corporate product mix.
We may be a seeing a bit of a change. Koch Industries, the privately held conglomerate is investing $ 2.5 billion in Infor. Koch owns stakes in INVISTA, Georgia-Pacific, Molex, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals, and many other entities with consolidated revenues in excess of $ 100 billion. Infor management is not expected to change much.
GE has been building out its Digital unit and Predix platform over the last couple of years with acquisitions like Wurldtech and Meridium. It announced this week the acquisition of ServiceMax, for field service support for $ 900m as it expands coverage of the Industrial Internet.
The difference, this time, is the investments in software are much larger – the chances they will be “forgotten” are slim. They open up opportunities for the software companies within their own portfolios, and with that the hope that the software will become functionally stronger with operational demands of those wide spread industries.
Probably a bit much to expect but most corporations have seen first hand the massive overruns and failures around enterprise software. If they can bring their Six Sigma and other quality disciplines to software for the benefit of broader customers, there will be much more to celebrate.
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Corporate investment in enterprise software
I have long wondered when corporations, especially conglomerates, would become enterprise software/service providers in their own right. The track record is patchy. You see financial service companies like Bank of America and Fidelity offer payroll and benefits support. You see vertical investments – Siemens with PLM and CAD, ABB with Mincom. You see auto companies cross license plenty of technology. But in many cases these services become invisible – a small part of the corporate product mix.
We may be a seeing a bit of a change. Koch Industries, the privately held conglomerate is investing $ 2.5 billion in Infor. Koch owns stakes in INVISTA, Georgia-Pacific, Molex, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals, and many other entities with consolidated revenues in excess of $ 100 billion. Infor management is not expected to change much.
GE has been building out its Digital unit and Predix platform over the last couple of years with acquisitions like Wurldtech and Meridium. It announced this week the acquisition of ServiceMax, for field service support for $ 900m as it expands coverage of the Industrial Internet.
The difference, this time, is the investments in software are much larger – the chances they will be “forgotten” are slim. They open up opportunities for the software companies within their own portfolios, and with that the hope that the software will become functionally stronger with operational demands of those wide spread industries.
Probably a bit much to expect but most corporations have seen first hand the massive overruns and failures around enterprise software. If they can bring their Six Sigma and other quality disciplines to software for the benefit of broader customers, there will be much more to celebrate.
Corporate investment in enterprise software
I have long wondered when corporations, especially conglomerates, would become enterprise software/service providers in their own right. The track record is patchy. You see financial service companies like Bank of America and Fidelity offer payroll and benefits support. You see vertical investments – Siemens with PLM and CAD, ABB with Mincom. You see auto companies cross license plenty of technology. But in many cases these services become invisible – a small part of the corporate product mix.
We may be a seeing a bit of a change. Koch Industries, the privately held conglomerate is investing $ 2.5 billion in Infor. Koch owns stakes in INVISTA, Georgia-Pacific, Molex, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals, and many other entities with consolidated revenues in excess of $ 100 billion. Infor management is not expected to change much.
GE has been building out its Digital unit and Predix platform over the last couple of years with acquisitions like Wurldtech and Meridium. It announced this week the acquisition of ServiceMax, for field service support for $ 900m as it expands coverage of the Industrial Internet.
The difference, this time, is the investments in software are much larger – the chances they will be “forgotten” are slim. They open up opportunities for the software companies within their own portfolios, and with that the hope that the software will become functionally stronger with operational demands of those wide spread industries.
Probably a bit much to expect but most corporations have seen first hand the massive overruns and failures around enterprise software. If they can bring their Six Sigma and other quality disciplines to software for the benefit of broader customers, there will be much more to celebrate.
November 16, 2016 in Enterprise Software (IBM, Microsoft, Oracle, SAP), Industry Commentary | Permalink