From SCDigest's On-Target E-Magazine
- July 9, 2014 -
Supply Chain News: Warehouse Management Players Accellos, HighJump to Merge
Deal Brings New Heft to Accellos, Helps it Move into Tier 2 and Tier 1 Customers
SCDigest Editorial Staff
Consolidation continues on in the supply chain software market, as in a mildly surprising move, Accellos announced it was acquiring HighJump Software. Both companies are known primarily as Warehouse Management System (WMS) providers, though each also offers EDI-based trading partner solutions as well.
The move by Accellos will certainly give it additional heft in its quest to move into the WMS market's top ranks, also aspired to by Softeon, TECSYS, and Cloud-focused players Snapfulfil and Logfire, among others, all chasing traditional best of breed leaders Manhattan Associates and JDA (after its acquistion of RedPrairie in late 2012.
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| Given the different markets the two products serve, Collins added that the company is in no hurry to merge the two WMS solutions. |
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Accellos, based in Colorado, will retain the HighJump name, and its current CEO Michael Cornell will keep that role in the combined company.
Accellos has its WMS roots in part in a product that was called Radio Beacon, which it acquired in 2006. Radio Beacon catered to smaller DC operations.
Under Accellos, the company has continued that small to lower mid-market focus, especially in areas such as wholesale distribution, consumer goods manufacturing, and the 3PL market. It has had great success selling into companies that use mid-market ERP solutions such as Microsoft Dynamics, Sage, SAP1 and others, primarily using a channel strategy of value-added resellers of these ERP packagers, bolstered by pre-built integration with those systems.
HighJump, based in the Minneapolis area, has a customer base that certainly skews larger than that of Accellos, though it has largely targeted the mid-market as well over its history, though with some tier 1 customer success. It has its roots in a company called Data Collection Systems Inc., which provided shop floor data collection technology, but which moved into the WMS market in the mid-1990s. In 2004, it was acquired by 3M in a surprising move, when for awhile 3M had ideas of being in the supply chain software business.
But with a new CEO later coming into 3M that plan was soon changed, and HighJump was spit back out as an independent company a few years afterwards under new investors. The company struggled initially, but after a new CEO and private equity backer a few years later, the company has regained momentum and posted strong results of late, especially in the omni-channel market.
Dwight Klappich, who follows the WMS market for Gartner, thinks the move is largely a positive one for Accellos.
"Overall this is a good merger and makes a now much larger combined vendor solely focused on supply chain execution, including a notable presence in B2B integration, about 40% of the business," Klappich told SCDigest. "The merger is synergistic, improving the viability of both beyond the combined revenues with some potential for the cross sell of products."
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"While there is potential to serve two strata of market - small and medium, and medium to large - few vendors have pulled this off because there are notable differences in how a company approaches these distinct markets," Klappich added. "It affects sales, support, R&D, pricing and other areas. High-end customers focus on breadth and depth of functionality, while low end customers are more concerned with ease of use, implementation time and effort and total cost of ownership."
