Switzerland-based MSP SoftwareOne's strategic acquisition of Novis Euforia, a Spanish SAP and cloud firm, marks a significant milestone in its ambitious expansion plan across the Southern EMEA region, according to PF Grillet (pictured left), Global Lead of SAP Services at SoftwareOne, and Nunzio Panto (pictured right), Regional Leader for Services in Southern Europe.
For both Grillet and Panto, two highly influential figures involved in spearheading the cloud service provider’s growth, this decisive move is also a bold step towards enhancing its prowess in SAP capabilities in the region and helping clients, particularly in Spain, transition to SAP S/4HANA in the cloud.
“The deal of Novis fits our strategy in two ways,” says Grillet. “First, we did not have a strong presence in South Europe, which was the last region where we hadn't acquired. And second, it aligned with what we do in helping customers transition to the cloud and move to SAP S/4HANA.
“Novis partners with a company in Germany called SNP Group, who specialises in Bluefield, also known as selective data transition, to automate the migration from SAP ECC systems to S/4HANA. That's certainly something we want to leverage to support our selective data transition or Bluefield project in other geographies.
“We have estimated that the market accessible to us for software services has the potential to expand at an approximate 30% compound annual growth rate (CAGR) each year. This growth is particularly expected in the period leading up to either 2025 or 2027. During this time frame, there is a significant opportunity as customers will need to transition to S/4HANA, given that their existing ECC solutions will no longer be maintained. We are very excited because in the next four years there will be an explosion of demand for customers to move to S/4HANA.”
The merger, which is the company's seventh to date, also opens up a new stream of revenue in the Southern European region. "In Spain, our growth has exceeded 40% annually. It seemed a logical progression for us to acquire Novis, especially considering our two-year collaboration. We believe this move is beneficial for both parties,” Panto explains.
“This deal has brought numerous experts and senior personnel on board, greatly expanding our customer reach in Spain, Italy, and France. Our aim is to keep expanding the business, as we see significant potential for growth in these areas."
SoftwareOne has a substantial customer base, totalling 65,000, with approximately “one-fifth” of these being clients for software reselling and services, Grillet said. The company serves clients in the US, Canada, Latin America, the UK, Ireland, German-speaking countries, Central Europe, and is expanding in Hungary. It also has a growing presence in Asia, Southeast Asia, the Middle East, and Australia.
Grillet emphasised the significance of acquisition, stating that Novis has "brought approximately 30 to 40 customers" and highlighted a key group among these being "transactional clients" in the resale of software and hardware, which enriches SoftwareOne's client diversity and market presence.
Challenges
While the acquisition, new customers, and an expanded team offers a wealth of opportunities, as noted by Grillet and Panto, SoftwareOne faces industry-wide challenges, particularly in locating and hiring candidates equipped with the necessary skills to drive growth.
“The challenges SoftwareOne face is that our brand isn't as prominent in the SAP market compared to some competitors,” Grillet says. “To effectively compete, we've developed an advisory service that combines the dual strengths of technical SAP on cloud skills and licensing and commercial expertise, a combination our rivals often lack in a single team. Being small has its advantages; it allows us to easily gather experts in one place. This congregation of talent is our ticket to compete in the market.”
Grillet emphasises that there is a “growing appetite” for this sort of experience in the industry, noting that at SoftwareOne, "the people you see in the presales” are the people that deliver. “This approach has driven our growth in every market where we've acquired companies. I believe this method fosters lasting trust, which is why a significant number of our clients choose us for managed services.”
Another challenge for SoftwareOne is determining the types of market segments it serves, Panto adds. “We serve major clients in the reselling sector, where we are the preferred partner for transactional business with companies like Microsoft and AWS,” he highlights. “In the service domain, our focus is more on the corporate arena.
“This occasionally leads to some friction. The question is which specific type of customer should we target and how we can cater to their needs comprehensively, offering a 360-degree service approach.”
Future outlook
Despite these challenges, Grillet remains optimistic about the prospect of driving growth. He highlighted that SoftwareOne is actively seeking other SAP partner targets, focusing not only on Southern Europe but also considering other regions.
“Our process of seeking, evaluating, and validating potential acquisitions is ongoing,” he says. “We have a team specifically tasked with this, and they are always active. Acquisitions are a constant consideration, but finding the right target at the right time can be challenging.
“There are significant markets where we currently don't have a presence, such as China and Japan. Additionally, in large markets like the US and Germany, where SAP already has a strong foothold, strategic acquisitions could further accelerate our growth.”
However, he notes, SoftwareOne has specific criteria that must be met when considering potential acquisitions. “We apply several criteria to ensure cultural alignment, market approach, and branding harmony in our acquisitions. In the case of Novis, it perfectly exemplifies this. What we acquire enhances and complements our existing operations.
“They have developed their proprietary Intellectual Property (IP) which complements ours. Their team includes experts, just like ours, and we both aim to immediately impress clients with our competencies.”
