Field Service News speak exclusively to Evatic, CEO Pål Rødseth, about their 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, much of which has seen major global enterprises such as GE and Microsoft entering the market, through acquisitions of ServiceMax and FieldOne respectively, plus there has also much been private equity investment in established leading brands within the industry such as ClickSoftware, ServicePower and IFS.
However, there is another organisation on the acquisition trail which has gone beneath the radar of many of the more mainstream IT and Business focussed trade journals, yet they are perhaps set to have an equally big impact on the field service management landscape - that is Norwegian company Evatic who currently have offices in Norway, Sweden, Germany, France, Holland, UK, America and Singapore.
UK readers may well recognise the name as they acquired the highly respected British FSM pioneers Tesseract towards the end of last year - however that was just the first piece of the puzzle as the Nordic firm aim to build up a pan European organisation. Indeed, they’ve spent little time resting on their laurels and have recently added a second FSM provider to their growing family having recently acquired Swedish company WinServ.
UK readers may well recognise the name as they acquired the highly respected British FSM pioneers Tesseract towards the end of last year - however that was just the first piece of the puzzle as the Nordic firm aim to build up a pan European organisation
“WinServ has been the toughest competitor to Evatic over many years in the Nordics,” explains Pål Rødseth, CEO, 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 also predominantly spread across the Nordics with a large market share in Sweden. So for Evatic this move is more about building a dominant base in their primary sector to build upon rather than spreading their wings into different sectors or geographies.
Taken 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 certainly is a certain grain of truth in that assertion. However, as Rødseth explains there is a much more focussed strategic approach to Evatic’s approach to 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 twenty odd years that are not able to take the next leap forward in product development,” he explains.
“We see customers demanding more and more functionality. They are demanding new solutions be Cloud based, they are expecting business intelligence capabilities, 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 across.”
“We believe that here is a need to consolidate these ten to twenty employee companies across Europe to be able to keep on developing solutions because if you don’t do that you will eventually lose your customers over time."
"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. The SME market remains largely under served and with so much money flowing into FSM providers at the moment the main battleground has become the enterprise sector - leaving plenty of space for someone like Evatic to come in and dominate amongst smaller organisations.
But of course, this can also be a very tricky path to negotiate. Will there come a point when by unifying the many smaller companies together essentially Evatic risk transforming into a big business themselves and lose the flexibility and adaptability that often makes smaller providers the right fit for their client base in the first place?
We don’t want to become a Microsoft. We want to be able to retain flexibility and be able to take decisions quickly and work efficiently but we also want to scale the business more than we’ve done so far
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.”
“But we do have a list of 8 to 12 companies that we follow and we are in dialogue with them and we have investors that back our strategy and we do have the ability to move quickly if we need to.”
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