Article

SAP to buy manufacturing execution software company

Courtney Bjorlin, News Editor

SAP's announcement today that it will acquire Visiprise, a software company that specializes in manufacturing execution, is good news for SAP's manufacturing customers, according to analysts.

SAP said this morning that it will acquire Alpharetta, Ga.-based Visiprise, which has 300 employees, for an undisclosed amount. The deal is expected to be finalized next month.

Acquiring the company will give SAP customers more integration capabilities, specifically when it comes to the NetWeaver platform, as well as leveraging the applications within their ERP suites, analysts say.

However, the bigger picture here is SAP's continued show of strength in the manufacturing sector. Visiprise builds manufacturing execution software (MES).

"It signals SAP's commitment to manufacturing," said Simon Jacobson, senior research analyst at Boston-based AMR Research. "Now you can buy

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MES from your ERP provider."

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It's part of SAP's Perfect Plant strategy, according to John Zepecki, senior vice president and general manager for SAP suite edge solutions, an organization responsible for assimilating acquired products at SAP. They're trying to meet the total needs of manufacturers.

Manufacturing execution software is used to manage and monitor work on the shop floor. By combining MES and their existing ERP software, customers can link manufacturing planning across the supply chain and plant-level execution to ensure the delivery of products.

"It shows that when there's a core functionality missing, SAP is willing to partner, and willing to acquire, [to get it],"said Ray Wang, principal analyst with Cambridge, Mass.-based Forrester Research.

Jacobson said the new functionality will be especially attractive to the aerospace, high-tech and defense industries.

The deal is no surprise, he said. SAP has been re-selling Visiprise's MES as an SAP product since last June.

But, though the product has a stable roadmap, non-SAP shops could be in trouble, Jacobson said.

"Visiprise customers who should have concerns are Visiprise customers who are Oracle shops," he said, adding that he wasn't ready to say whether they'd be forced onto SAP ERP platforms.

A total of two-thirds of Visiprise's customers are SAP shops, according to SAP.

"We'll continue to position this product to non-SAP shops," Zepecki said. "[This is] an excellent opportunity to build or enhance relationships in the manufacturing space."


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