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AUGUST SOFTWARE NEWS: Infor trims 42 positions at Pegasus

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29th Aug 2006
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29 August - Infor, the new owner of Systems Union, announced 42 redundancies at its Pegasus subsidiary, just days after the company announced the launch of the latest version of Opera II.

The cuts affected 12 developers, some of whom specialise in Visual FoxPro programming for Opera II. Pegasus managing director Gary Turner said the company was planning to "reconfigure" its R&D team before the Infor acquisition. This coincided with the other cutbacks, he explained.

"In every merger and acquisition, there is an element of centralisation and there are bound to be casualties," he said. "It's sad, but what is absolutely definite following the acquisition is that Infor is investing in Pegasus as a brand and a business."

He added that Opera II is developed with Visual FoxPro, but can work with both FoxPro and SQL Server databases.

In an odd coincidence, AccountingWEB member Darren Woodford posted an request for Opera II FoxPro programmers on the Opportunities. "Hopefully one of them might see my posting," he said.

Dennis Howlett broke the news of the redundancies in his AccMan Pro blog, and has been tracking the efforts of former Pegasus staff to find new positions. Some staff members vented their anger and pooled information in a blog called Pegasus Divided, but this has since been turned into a private Google group, Howlett reported. One contributor predicted that Systems Union would also announce job cuts on 8 September.

* * *
Executive changes at Sage UK
18 August - The Sage UK management team has a different look after mid-market division managing director David Karlin decided to take a year's break. Karlin, who oversaw the development of Sage's new mid-market solution, MMS, will be replaced by Brendan Flattery, who was previously managing director of Sage's accountants division. His post will be taken up by Greg Ford, who headed the company's TAS Software operation. No appointment has been announced yet for that post, even though TAS has just introduced a new entry-level package to the market called Zebra.

For Ford, the move is a return to the accountants division, where he was head of product development during 2003-05. That was a difficult period for the division, as it had to address overlaps between products that were acquired from Taxsoft, CSM, Hartley and Apex. During his time with the accountants division, Flattery oversaw its transition to a unified team based in Manchester and is credited internally with improving all-important customer satisfaction ratings.

* * *
Infor keeps ERP consolidation rolling with Extensity deal
8 August - Venture-capital backed software group Infor has gobbled up Extensity in the latest in a string of acquisitions in the financial and enterprise software market.

The last we heard of Extensity was back in April, when it acquired Systems Union, bringing the Extensity, Compshare, Geac, SunSystems and Pegasus product families into a single portfolio. As part of Infor, they will join SSA Global, which formally became part of Infor on Friday 28 July in a deal valued at $1.6 billion.

The Extensity deal is the 20th acquisition Infor has made since it was founded in 2002. With projected annual revenues of $2.1 billion, Infor CEO Jim Schaper claimed to be the third biggest ERP supplier in the world, behind SAP and Oracle.

The hidden hand behind all this consolidation is the US venture capital group Golden Gate, which is the majority shareholder in Infor and also backed Extensity's acquisition drive. The latest deal is backed with a $2.25 billion loan and a $1.4 billion "senior subordinated bridge facility". The organisations involved in these arrangements include a roll call of Wall Street's biggest investment banks: JPMorgan, Credit Suisse, Merrill Lynch, Goldman Sachs, Wells Fargo and Barclays Bank.

But, new Infor customers may be asking themselves, what do these organisations know about software development and delivery?

AMR Research hailed the Extensity purchase as a good strategic move for Infor because the business intelligence tools from Systems Union (MIS and Lasata) and Geac (the former Comshare CPM) fill a gap in its product line.

According to Ovum analyst David Bradshaw, however, Infor has two choices: Sage's "financial control" model, where the acquired companies carry on selling their existing products under the new management; or "portfolio unification", where the products are rationalised into a uniform set. US companies tend to go for the second option, and where Sage's subsidiaries are based in local markets with distinct products, there is a lot of duplication within Infor's collection of products aimed at mid-to-large companies.

"Some blending of the [Infor] product sets is unavoidable, with the disruption this brings," Bradshaw predicted.

* * *
Sage buys US medical practice software group
8 August - Sage is to acquire US medical software specialist Emdeon Practice Services in a deal estimated by the company to be worth £297 million.

EPS software is used by around 20,000 practices to maintain patient records and handle administrative and financial processes such as appointments, prescriptions and billing. The company made a profit of roughly £11.4 million on revenues of £160.3 million in the year to 31 December 2005.

"Acquiring Emdeon Practice Services enables Sage to market its products and services to a substantial new community of small and medium-sized businesses in the US," said Sage chief executive Paul Walker. "This acquisition continues our strategy of providing industry-specific solutions, by bringing dedicated Sage solutions to this business sector for the first time."

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