Its already been a busy year for acquisitions in various realms of the service space. To start things off PTC acquired ThingWorx in the Internet of Things space, which was followed by Microsoft acquiring Parature in the customer service support arena. We also saw Verint acquire Kana to boost its customer engagement capabilities. The field service space had been relatively quiet, until ClickSoftware announced that it had acquired Xora in February.
ClickSoftware, coming off a record revenue year in 2013, hasn’t traditionally been very active in the acquisition market and has been quite successful in growing its customer base organically as well as with its established partnership with SAP. However, in recent times we have seen ClickSoftware look to expand its partner network as seen with a newly developed partnership with salesforce.com in mid-2013. Building on that partnership we have seen ClickSoftware try to expand its mindshare with major North American carriers via this acquisition of Xora.
Xora has built itself a nice customer base of 15,000 organizations in the smaller end of the market. The average Xora customer has 8-10 users though the organization has had success in reaching up and grabbing larger customers such as Lawn Ranger and Dr. Pepper. Most customers fall in the healthcare, public sector, distribution, or merchandising verticals primarily using Xora’s applications for dispatch, work order management, navigation, mileage and expense management, and proof-of-service capture. Xora’s growth in customers has been tied to well-established relationships with carriers in the US such as AT&T, Verizon and Sprint. Verizon white labels Xora’s (previously Gearworks’s) product in its Field Force Manager solution. These carrier relationships can be extremely vital as ClickSoftware looks to expand to new markets to supplement its core customers in utilities, telecommunications, and office equipment. There are other benefits to this acquisition (listed below):
- Expansion into the smaller end of the market (less than 50 field workers) and the ability to offer a scalable expansion map for organizations who can start with the Xora StreetSmart product and scale up to ClickExpress or ClickSoftware for the Enterprise as they grow. ClickSoftware has previously attempted to scale down or acquire to meet the lower end of the market without significant success and has opted to maintain 50-technician floor when prospecting new business. Scaling down ClickExpress further doesn’t make as much sense here as acquiring a solution that is purposely built and priced for smaller organizations.
- Expansion into home healthcare, a market that is extremely ripe for growth when it comes to mobile applications and mobile workforce management.
- Increased attention to the small to mid-sized market outside of North America by introducing Xora’s product to ClickSoftware’s established carrier partnerships.
- Continued growth of ClickSoftware’s SaaS business.
- Introduction to the fleet management market with Xora’s InVehicle product.
- An extension of ClickSoftware’s Click2Click integration framework given Xora’s popularity with contractors.
That said, this acquisition is primarily about adding a strong group of carrier partners in North America, a move that hasn’t strongly been pursued by the enterprise focused field service automation providers in the past. Carriers have traditionally been reluctant to sell workforce management solutions to the enterprise market and have found it easier to get their sales teams to focus on the small to mid-sized market. Do they have the appetite to go up market and introduce ClickSoftware’s field service solutions to the enterprise? This will be key in determining the true success of this acquisition.