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Unit4 has been a successful investment for the current main owner Advent International who acquired the company in 2014. At that time (when Advent bought Unit4 off the stock market) Advent paid 1.6 billion dollars for Unit4. The new owner TA Associates together with Partner Group is buying the company for about 2 billion dollars.
During the years under Advent's ownership, Unit4 has experienced a steady and strong journey to today being considered one of the global and leading vendors of ERP systems. And it should be remembered that the flagship Unit4 Business World or the recently launched ERPx originate from Agresso which 15 years ago was still considered a Nordic product with a relatively narrow business focus. When the Norwegian Agresso was acquired by Dutch Unit4 in 2000, it was two relatively small organisations that merged and formed the base for what today has developed into an international success.
Many of us who have had insight into both the company and the product for more than 20 years probably found it difficult at the time of the acquisition to see the potential for the merged business. Unit4 (formerly Agresso) has always been regarded as an exceptionally strong financial system with some strengths in project accounting. But even there parts of the product (under the hood) did not impress. Quite often (although many years ago) it was clear that the product was developed in a way that created quite a few problems and challenges when increasingly larger customers demanded continued broadening and deepening of the product. Much of the strength of the product lay in the technical finesse behind multidimensional accounting and the product's very competitive reporting and query engine. But where new demands and needs regarding front-end systems and continued development required challenging old truths and fine-tuning the engine under the hood.
It is at the same time quite natural that products that have survived 30-40 years must be powerfully refurbished about every 10-15 years in order to manage the next generational shift. And then a new interface is not enough, the engine must be taken apart and rebuilt.
Now in 2021, we can note that Unit4 has gone through several generational shifts and where the new version ERPx is ready for launch. And over the past 20 years Unit4 has gradually moved its target group from small/medium-sized organisations and established itself as a vendor also for large and international organisations. It still cannot fully compete with SAP and Oracle when it comes to "multinational and global corporations" but it is not far behind. And every year that passes we see Unit4 moving up the list among global ERP system vendors.
A cautious approach should be adopted when comparing ERP systems against each other. Although many of the large systems SAP, Oracle, Microsoft, Infor, IFS, etc. are often lumped together and likened to each other, there are very large differences which make many comparisons incorrect. In the case of Unit4 it is definitely an ERP system but also a significantly narrower ERP system compared to the aforementioned competitors. Unit4’s successes primarily lie within the target group of customers looking for financial systems and preferably with a project-oriented focus as well as needs within procurement and service. This target group includes both construction and contracting but also a large part of the service sector and public sector. But we also see that Unit4 sometimes takes on the role of financial system for manufacturing groups that use several or other ERP systems for their production and logistics.
There are several reasons behind Unit4’s journey to becoming an international success. Partly this is connected to involving the board and management with extensive experience from competing ERP systems and experience of leading global companies. But it is also connected to the trend that more and more companies have begun to question whether they really should have "one big ERP system" that covers everything in the business, and where many see advantages with partially breaking up the monolith and accepting a landscape where several different applications with unique strengths collaborate (what we sometimes call best-of-breed). And in the transition to a cloud-based world where the customer demands more a service to serve parts of the business, it fits well with a strong and well-developed financial system (now Unit4 is considerably more than a financial system, but compared to many competitors it has the character of a financial system).
To the above should be added that Unit4 (like many other large vendors) has made large investments to both move to become a cloud vendor and with very strong focus on building in and being able to apply new smart services in the form of machine learning and digital assistants.
Unit4’s ambitions going forward are to become a global leader in system solutions for organisations that operate according to the modern principles of "project-centric" and "people-centric". This means organisations where a substantial part of the business is based on services (and not manufacturing, trade, logistics) with many employees and great needs for interaction between employees, between projects and between the customers and partners who interact in the projects the business conducts.
With the new version ERPx, Unit4 has further advanced in the market and can today seriously compete with "all" the large and global vendors of ERP systems – as long as it concerns the target group that Unit4 focuses on. No, Unit4 does not yet cover +200 countries but it does have the conditions to manage all continents and many of the large countries.
Having said all this regarding Unit4’s success and position in the market today, it should be added that competition going forward will be even tougher than it has been over the past 20 years. And it is in light of this that one should see the ownership change in Unit4 and that new muscle is coming in that can provide power in the big work still ahead. Tomorrow’s ERP systems will not survive solely on merits in functionality or industry knowledge. We are in a time of rapid change and a substantial part of this change is connected to the availability of and opportunities with all the smart services under development within the concepts of voice control, machine learning, big data, predictive analytics etc.
We are on the threshold of what could be called “intelligent” systems where the system becomes increasingly autonomous and self-learning. But to succeed with this requires very large investments and, in addition, many of today’s technologies will be replaced by new ones which requires investing and reinvesting when technical shifts occur and where one cannot be sure which technology will survive in the long term.
Unit4 has fought its way to a place among the large and respected vendors of ERP systems and now receives new energy in the business through new owners and continued efforts towards growth and acquisitions. At the same time, the perception of the concepts of ERP systems and apps is changing and it is not certain which type of vendors will still stand strong if we look 10 years ahead. Unit4 will continue, like other large vendors, to constantly prove its capacity in order to remain in the leading cluster.
