Invensys Retools, Hangs On To Baan

Invensys plc, the parent company of enterprise resource planning software maker Baan, is undergoing a major restructuring.

The diversified technology company earlier this week said that going forward it would focus on two core divisions – Energy Management and Production Management – which will serve specific vertical markets.

The London-based company will also sell off its Industrial Components and Systems division, which would have garnered for the year ended March 31 sales of about $3.3 billion, or one-third of all Invensys revenue.

The businesses remaining in the Production Management division, of which Baan will be one, will provide production technologies and services to several industries including oil, gas and chemicals; power generation; food, beverage and personal healthcare; and discrete and hybrid manufacturing.

The Energy Management division will address power and energy; and building trades markets.

Invensys purchased then ailing-Baan two years ago. Industry observers questioned whether the pair would last.

"What is most significant [with the restructuring] is that Invensys has come to a core decision that Baan is key to Invensys going forward," said Baan President Laurens van der Tang. "There had been rumors of Invensys would sell Baan."

Once viewed as the wayward stepchild of Invensys, Baan now appears in more solid standing. As a result, the company is placing a greater emphasis on getting new products to market.

In March, Baan will release the second generation of collaborative products that will be combined with the iBaan collaboration platform. Over the next 24 months the company will steadily release products from its LeanWare line that will help manufacturers get leaner in how they operate, work with suppliers and steer production.

And as Invensys becomes more of an integrated company, Baan will take advantage of some of the synergies that exist with its parent company, according to van der Tang.

The biggest example of that synergy is with Invensys line of Wonderware products – manufacturing software used on the shop floor – that Baan will tightly integrate into its solutions.

The vote of confidence from Invensys could be the push that Baan needs. The Netherlands-based company fell on hard times several years ago and has been struggling to make its way back as a business-to-business software company.

The efforts have paid off, according to van der Tang. More than 50 percent of Baans software sales are in e-business. Over the past 18 months the company has added 320 customers and license revenues increased more than 50 percent. Some 40 percent of the companys revenues are from U.S. deals

"The U.S. is absolutely an important market for us," said van der Tang. "Over the past six months the pipeline has opened up for us."

However, Baan faces stiff competition from well-ensconced ERP vendors turned B2B software makers, including SAP AG, PeopleSoft Inc., Oracle Corp. and J.D. Edwards & Co.