If it seems like only a few short years ago that GE Digital’s acquisition of ServiceMax, at an eye-watering price that exploded the market, was dominating headlines across and beyond the field service sector, that is because it was. Kris Oldland met with their new CEO Neil Barua and President of newly acquired Zinc, Stacey Epstein to see if this time around the recently announced Silver Lake acquisition may prove to be more of a success.
I know many people at ServiceMax. Many good people. Heck, I even helped one or two of them get the job there. “It’s a good company, with a great ethos, that just really gets service,” I would say when people asked me for my honest appraisal of the company.
That was before they became acquired for close to a Billion dollars back in late 2016. Now, to be clear, I’m not saying that their ethos changed at that point or that they lost track of being a field service management software company that ‘really had their head around field service’. In fact, I’d say the transition from the independent company it was under former CEO and founder Dave Yarnold, to becoming part of the family at corporate giant GE, a transition led by then-new CEO Scott Berg – who had been Yarnold’s number two for many years, was just about as smooth as these things can be.
Indeed, the last time I spoke with Scott, whom I’ve known as long as I have Dave, there were still echoes of his former boss’ approach in his words and his vision. However, it was clear that that vision was now slowly becoming integrated with the bigger whole and wider picture that belonged to GE.
And then things did seem to go quiet for a while. ServiceMax in their first incarnation were constant innovators and boundary pushers. Sometimes they got it wrong like they did when they developed several apps for smartwatches and Google Glass. Sometimes they got it right, very right – like they did when the launched Connected Field Service and got the jump on all their peers in bringing IoT to the world of service.
They also had a knack for working with brands that matched their ambition. Companies like Elekta who were shipping their med-tech devices with 56K modems some thirty years before IoT was even the first concept of an idea that would become a ‘thing.’ Companies like Schneider Electric who somehow managed to fully roll out a new FSM and Mobility solution worldwide within just six months. Companies like Sony who were taking pioneering steps forward into servitization within the broadcast sector supplying one Spanish broadcaster with an entire news studio on a cost per use basis in Madrid in a complete industry first.
All pioneers, proudly empowered by ServiceMax.
“It will take time for them to become fully embedded before we see the real fruits of the union between ServiceMax and GE,” was the consensus as to why the noise that we were used to coming out of those offices in Pleasanton, California and London in the UK had quietened down significantly over the last year or so.
The problem was that by the time that integration was even close to happening, by the time the last person at ServiceMax had finally gotten their new business cards and at last become used to giving out their new GE email address, their acquisition by Private Equity (PE) firm Silver Lake had suddenly been announced.
In my experience this can be a great thing to happen to a company sometimes, PE firm EQT is doing a great job at the helm of IFS for example and driving that business forward. In other cases, which I shall not name and shame, but plenty do exist, PE acquisition can be a hellish scenario of asset stripping and cost-cutting to nightmarish proportions.
So which type of PE owner will Silver Lake be? Well, their track record is certainly impressive in the technology space, so that goes some ways to alleviating initial fears. However, understanding the new vision of the company, in this third iteration, was still at the top of my agenda when I sat down with Neil Barua, the new CEO of ServiceMax and Stacey Epstein, President of recent ServiceMax acquisition Zinc.
You see for me, a healthy ServiceMax is good for the market in general. Most industries, but field service especially, tend to go through ebbs and flows of consolidation, with periods of stagnation and innovation correlating closely to the number of strong players within the sector.
“In terms of how we think about companies, you can test out that with any of the companies that we own and have owned,” replies Barua when I question Silver Lake’s motives for acquiring ServiceMax in a manner vaguely akin to a father assessing suitors for his daughter. “It’s all around how you take a business and grow it. There are several flavours of PE, I’m sure you’ve covered PE owners in the past that come in and like to cut costs and maximise the P&L and cash flow. Others, like ourselves, prefer to grow a business and that’s where we’ve made our money and why we tend to buy assets of similar flavours.”
In many ways, it all does seem a little bit surreal, given the high publicity of the GE acquisition to be sitting here discussing yet another new chapter in the ServiceMax story just a few years on. However, as Barua explains, it was an unusual opportunity that Silver Lake was quick to spot and agile enough to take advantage of. “We shouldn’t have been able to buy it, GE should have retained it,” he comments. “They were going through their financial issues, and we picked up an asset that, as a standalone business we think, given our capabilities and the momentum the team already has, we can take to a whole different level.
“You’ve talked before about the technology and also the importance of understanding the customer as being something of a secret source here at ServiceMax. I think I also saw that, which is why I aggressively put my hand up to be part of this and to take on the role that I’m now currently in,” he adds.
"A healthy ServiceMax is good for the market in general..."
So does Barua think that the last few years with GE will have tainted the once glowing ServiceMax brand? The sheer high-profile nature of the original acquisition and the figures involved mean that selling so shortly after would indicate something of a failure in the deal, in perception terms at the very least.
“I actually think we’re way in the lead right now,” he replies when I put this to him, “I really don’t think things have gone negative in terms of going through the GE experience and in fact it made us stronger as a company. Now, as a standalone business, we’ve got the agility and the shareholder base to move quickly on behalf of our customers.”
Of course, we wouldn’t expect a newly appointed CEO of any company to say anything other than such. It is the standard, forward-looking, front foot standing statement that I would have expected from any new CEO. However, I must admit that Barua puts his message across with the type of swagger that was fairly prevalent at ServiceMax pre-GE. He’s certainly not your cookie cutter PE CEO, and I’ve come across a few in my time. There is an undercurrent of enthusiasm in his voice and mannerisms, which is both unexpected and infectious.
“Failure is not an option for this company. There’s an element of the legacy of this business and the history of this business and that’s part of the reason why I feel so great about the company, and why Silver Lake equally does,” he states.
Falling back on the legacy as our discussion rolls on, we trade some stories around the history of the business, which is one I have been close to for some time and have watched progress in its journey from the small rented office Dave Yarnold lovingly referred to as the ‘Beige Palace’ back in San Francisco right through to today.
“Dave and Scott were awesome guys,” Barua nods showing a great deal of respect for his predecessors. “The teams that they led, they made a difference to people. I just think that there is still so much more that we could do for that customer base and that’s the excitement that Silver Lake and I have now, and the strategy and the optimism around what this company can do is fascinating.”
Of course, solidifying that link to the past is Stacey Epstein, who in her role as President of newly acquired Zinc is the newest member of the ServiceMax executive board, yet as former CMO of ServiceMax has roots right back to the beginning. “I remember the first iPad app, and we were the only people that even thought about putting something on the iPad,” she recalls.
“There has been this tradition of ServiceMax leading the market. I think you look at some of our earliest peers, the likes of TOA or ClickSoftware; they were good software but were only focused in one area of field service, really hyper-focused on scheduling. ServiceMax was always innovative across the whole full-service lifecycle.
“Click was what Click was. They solved a problem, and they did it pretty well. TOA then came and did it in the cloud, but it was still kind of the same problem.Then ServiceMax came along and said, ‘let’s look at parts, let’s look at logistics, let’s look at warranties and time elements.’ We saw there was a bigger service life cycle, and that was what field service management grew into. I think now we have an opportunity with some of the really cool and exciting technologies that are coming on the scene to do what we call service execution management, which involves tools like Zinc, that deliver real-time communication.”
As the evening progressed, it dawned on me just how important the acquisition of Zinc and Epstein’s return to the fold was for ServiceMax. Yes, the technology within Zinc is fantastic, but more importantly, it is one of a handful of solutions that can fill a hole not just in the ServiceMax solution but in the industry at large as well. It is absolutely on point with the current trends towards ever increasing customer engagement and improving customer experience and in that sense, it is precisely the type of well thought out solution that traditionally ServiceMax would have developed and then championed.
It is an innovation that can lead an area of growth within the wider industry and is a hugely valuable acquisition from that point alone. However, equally, it is symbolic of something else, as it is perhaps the spark that could well reignite the fire in the bellies of the sleeping beast of marketleading innovation that made ServiceMax such an essential and dominant player in the FSM market in the first place.
Even Epstein herself is the perfect personification of the old and the new coming together in this latest iteration of ServiceMax. After the official interview period ends the three of us share some further stories across a glass or two of wine, and at this point, it becomes apparent to me just how strong a potential team Epstein and Barua could be.
There is a natural the rapport between the two and while it is little wonder that someone with such experience in our sector as Epstein should have an impressive depth of knowledge of field service operations, I must confess I was pleasantly surprised by just how genuine Barua’s passion for empowering great service actually was.
There is a good balance between the two with complimentary skill sets and approaches and I can genuinely see them forming a formidable leadership duo if things remain on the current path.
So while there is still a long way to go before I’m prepared to shout this from the rooftops - as experience tells me there may still be be some further twists and turns in this tale, I’ll say it once, just as a whisper to try it out…“I think ServiceMax are back.”