Unit4 welcomed their new CEO, Mike Ettling, in April this year. Under his leadership, the company needs to take a new direction, he said during Connect 2019 in Amsterdam. The organization will focus on “People Experiences” and the cloud.
Ettling previously served as president of SAP Successfactors, a provider of Human Capital Management SaaS. As a result, he brings broad expertise and insights into cloud-based technologies and business applications, Unit4 said in a statement in April.
Ettling will share what that means during Connect 2019. “One of the biggest changes I’m bringing to the company is that we need to operate as a cloud company with some on-premise solutions,” said the new CEO. “That’s different from what we are now when it comes to the community and how your customers interact with you, how you bring products to market, and how you put yourself in the market.
One difference, for example, is that cloud companies need to get their products on the market as quickly as possible, rather than having to work on them endlessly first, according to the CEO. “We will change significantly over the next twelve months to look like a cloud company.” Internally, this means few shifts. “We’re already ready for the cloud, and that won’t change much.”
Moving with the market
The fact that Unit4 will have to resemble a cloud company does not mean that all attention will also be paid to the cloud and the on-premise solutions will disappear. “We will mainly shift to the People Platform, but that can still be used on-premise, and the services can be used on-premise.”
This is also important for Ettling. “I don’t want to be part of the group in the market that forces everyone into the cloud with a stick, so to speak. We are moving along with the market in this respect. Different countries have different levels of maturity when it comes to the cloud. Some countries like to work partly in the cloud, others want to remain on-premise.”
However, the CEO predicts that this will eventually change. “I think it’s only a matter of time before we all go to the cloud. We will play a leading role in this, but we will continue to move at the speed of the market. We won’t leave anyone behind.”
Of course, this new strategy does come with a number of changes. These will, for example, be visible in the acquisitions that the company makes. “Ideally, I need companies that are on the same track as we are, or that can get up to speed”.
“In addition, I mainly look at companies that I want to resemble, not companies that are what I am already. The ‘cloudiness’ of a company is important, says Ettling. It’s also important that a company can contribute to the growth rate and help scale up in the United States and Germany, which Ettling believes are key areas for Unit4.
“I’m less interested in buying customer bases,” Ettling continues. “If you look at the style of acquisitions by Unit4 over the past few decades, that’s a different style from what we’re going to do now.”
Ettling, however, is positive about the position he already has in the market. “There are many mid-market ERP companies in Europe, but most focus on manufacturing. In addition, the giants have tried to enter the mid-market, but they haven’t succeeded. I think that’s why we don’t have much competition in Europe.” The situation is different in the United States, where Ettling notices the emergence of NetSuite. Workday, which specializes in ERP for finance, HR and planning, is also a major competitor of Unit4.
Ettling is looking forward to the future, also when it comes to consolidating the market. “Consolidation is in full swing, and I expect it to continue in the coming years. I think we’re in a very good position to become the consolidator of people-based software experiences.”
That’s what Ettling is now betting on. But change costs money, which has to come from somewhere. Is Unit4 thinking about an IPO, for example, in order to realize financing?
“I have a philosophy that if you have a company that does well, the value will follow you.” An IPO is therefore not planned, for the time being. “Maybe, in the long run, I will need some new capital, but I’ll think about that when the time comes. I don’t worry too much about such dynamics.”