Evatic’s 2nd acquisition sees them put a firm stake in the ground for the SME field service sector

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[This article was previously posted on Field Service News.]

 

Field Service News speaks exclusively to Evatic CEO Pål Rødseth about the company’s ambitious plans to conquer the European SME market…

The field service industry has of course seen a lot of merger and acquisitions activity in the last couple of years. Major global enterprises such as GE and Microsoft have entered the market through acquisitions of ServiceMax and FieldOne respectively. There’s also been private equity investment in established leading brands within the industry such as ClickSoftware, ServicePower and IFS.

The field service industry has of course seen a lot of merger and acquisitions activity in the last couple of years. Major global enterprises such as GE and Microsoft have entered the market through acquisitions of ServiceMax and FieldOne respectively. There’s also been private equity investment in established leading brands within the industry such as ClickSoftware, ServicePower and IFS.

However, there’s another organisation on the acquisition trail which has gone under the radar of the more mainstream IT and business-focussed trade journals, yet is set to have an equally big impact on the field service management landscape. That is Norwegian company Evatic, which currently has offices in Norway, Sweden, Germany, France, Holland, UK, America and Singapore.

UK readers may well recognise the name as Evatic acquired the highly respected British FSM pioneers Tesseract towards the end of last year. But that was just the first piece of the puzzle as the Nordic firm aims to build up a pan-European organisation. Indeed, Evatic have spent little time resting on their laurels and recently added a second FSM provider to their growing family: the Swedish company WinServ.

However, whilst acquiring Tesseract was about securing the excellent IP that the UK team had developed and giving Evatic a foothold into the UK market, this latest acquisition is different. With WinServ it seems Evatic are making a move that firmly establishes them as the number one player in their home sector.

“WinServ has been the toughest competitor to Evatic over many years in the Nordics,” explains Pål Rødseth, CEO of Evatic.

In fact, around 50% of the 330+ clients that currently use WinServ are in the copy/print sector – which is also Evatic’s main area of focus. Additionally, WinServ’s clients are predominantly spread across the Nordics with a large market share in Sweden. So for Evatic this move is more about building a more dominant base in their primary sector than spreading their wings into different sectors or geographies.

Taking the two acquisitions separately, one may be mistaken in thinking that they were both merely opportunistic acquisitions for an ambitious company hungry for growth. Indeed, both Tesseract and WinServ were headed up by their original founders who were reaching retirement age – so there is certainly a grain of truth in that assertion. However, as Rødseth explains, there is a much more focussed strategy to Evatic’s acquisition pattern than merely picking up companies who happen to be in the right place at the right time.

“There are too many of these small companies that have all been around for 20-odd years that are not able to take the next leap forward in product development,” says Rødseth. “We see customers demanding more and more functionality. They want new solutions to be cloud-based, they are expecting business intelligence capabilities, and they are demanding easy integrations. All of these things are only possible if you have a large enough customer base to spread the development cost.”

Rødseth continues, “We believe that there is a need to consolidate these 10-to-20-employee companies across Europe to be able to keep on developing solutions. If you don’t do that, you will eventually lose your customers. You need to face up to what the bigger companies are doing in the service management space and be able to deliver the majority of that functionality down to the SMEs – which is our core customer base.”

It is an admirable approach and one that makes sense. Small and medium-sized organisations remain largely under-served. With so much money flowing into FSM providers at the moment, the main battleground has become the enterprise sector – leaving plenty of space for a company like Evatic to come in and dominate the SME market.

Of course, this can be a very tricky path to negotiate. Will there come a point when, by unifying the many smaller companies, Evatic risk transforming into a big business themselves? Will they lose the flexibility and adaptability that makes smaller providers the right fit for their client base in the first place?

“We don’t want to become a Microsoft,” says Rødseth. “We want to be able to retain flexibility, take decisions quickly and work efficiently, but we also want to scale the business more than we’ve done so far. We are moving into new premises in Wycombe with Tesseract, a facility that will have additional space for a good number of employees. We are planning to ramp up the Tesseract business and also expand into Europe.”

So how quickly can we expect Evatic to build their empire? With two quick-fire acquisitions back-to-back, Rødseth – perhaps wisely – is planning a fallow year.

“We need to be realistic in what we are doing,” he explains. “There are challenges in integrating businesses and there are challenges in getting people to work together when there are cultural differences and so forth. So I don’t think we will be making another acquisition in the next 6 to 12 months. We are more focussed currently on getting operational excellence in place. Doing M&A is challenging and the majority of such projects fail – we want to make sure ours doesn’t.”

Rødseth adds, “But we do have a list of 8 to 12 companies that we follow. We are in dialogue with them and have investors that back our strategy, and we do have the ability to move quickly if we need to.”