Commentary & Analysis
EFI Acquisition of ePACE: Boon or Bombshell?
EFI kicked off its annual Connect conference,
By Cary Sherburne
Published: July 30, 2008
EFI kicked off its annual Connect conference, one of the largest user group conferences in the industry, with a surprise announcement, the acquisition of MIS competitor ePACE. The announcement, unveiled at the first general session of the conference, generated quite a bit of hallway conversation among PSI and Logic users, the two MIS packages in EFI’s portfolio that ePACE is targeted to ultimately replace.
Marc Olin explained the acquisition by saying that since PrintCafé was formed eight years ago, customers have been asking when EFI would be able to standardize on a single product to eliminate the need to code the same thing several times to update all of the products in the portfolio. Although the company had hoped in 2000 to be able to start building a new platform, that didn’t ever transpire, and development continued on Hagen, Logic, PSI and PrintSmith. Olin said, “Back in 2006, we saw the writing on the wall related to the existing PSI platform, built on Visual FoxPro, which Microsoft was discontinuing, and we started developing a new platform, internally called PSI-X.” Olin admitted to the crowd of some 500 attendees that over the last year or two, EFI saw increasing competition for printers in the $2 million to $25 million revenue range that would normally have been served by PSI and Logic, and because of the legacy architecture of those products, the company was in a race against time to stay competitive. Facing a choice of increasing resources on the PSI-X project or seeking another alternative, the company began evaluating acquisition possibilities.
With the acquisition of ePACE, EFI has restructured its MIS portfolio to address three relatively discrete market segments, with its high-end Hagen product primarily focused on the $25+ million firms, PrintSmith focused on the sub-$2 million companies, and ePACE targeted at the mid-market.
Olin was quick to assure the audience that EFI was not forcing any existing customers to switch from PSI or Logic to ePACE, but rather would put aggressive pricing structures and transition strategies in place to encourage conversion, but continue to maintain the products into the foreseeable future for those who did not want to make the change.
Why ePACE? Olin indicates that a key attraction was the fact that the solution is based on an open source platform running on the Linux operating system. It is browser based and requires no client software. This makes it easier to operate cross-platform (Mac/PC) and to access the system remotely. PACE delivers the solution as an “appliance”; that is, all of the software is loaded on a Dell server and shipped to the customer, plug-and-play, ready for data entry. ePACE is also structured with a series of APIs that make it very easy for the user to customize the solution, rather than having to depend on purchasing professional services for desired customizations, or foregoing them altogether because of the cost. Also, EFI was losing an increasing number of deals to PACE as some existing customers chose to switch rather than upgrade, and new customers chose PACE because of its browser base and open architecture.
PACE has 500 active customers; PSI has about 900 and Logic has over 500. PACE management will remain in place and their offices will remain in Jacksonville, Florida. Olin indicates that the PACE development team will also remain intact, and will be augmented by EFI’s development team in India that had formerly been assigned to the PSI-X project, which will be discontinued.
In a session with the media, CEO Guy Gecht said, “For a printing company, the MIS is the heartbeat of the organization. We are not compelling anyone to move and will continue releases for both Logic and PSI for the foreseeable future. For those who do want to move, we will work on a migration path to move as much data as possible to either PACE or Monarch.”
EFI also announced a repackaging of its Hagen OA MIS solution, which will now be branded as part of the Monarch suite, a bundled, modular solution comprised of Hagen, Auto-Count for shop floor data collection, PrintFlow dynamic scheduling and EFI Prograph advanced production planning and JDF control. As part of this bundling strategy, EFI will work to more tightly integrate these solutions, although company management indicates there are already a number of customers using all of these modules together.
Under EFI ownership, ePACE will be branded as EFI PACE.
In wrapping up the media session, Dan Crnarich, Director of Product Marketing for EFI’s APPS group, said, “Our message to customers is that this acquisition is not about the features; it is about the five- to ten-year plan, and PACE gives us the runway to get there.”
During the rest of Connect, WhatTheyThink will be talking with PSI and Logic customers to see how they are taking the announcement. EFI also indicates that several PACE customers will be joining the event today and we will get their perspective as well.