The Confirmit and Pulse Train merger could prove a good fit, but what does it mean to customers?
The news that Confirmit and Pulse Train were merging seemed to take everyone by surprise – possibly because there has been so little consolidation among MR technology firms to date. With the exception of a clutch of acquisitions by SPSS in the late 1990s. and by GMI more recently, M&A activity in the MR tec-sec has been pretty much on hold throughout the last decade – a period in which MR mergers became a weekly event.
Though billed as a merger, this is effectively a takeover. Confirmit has bought out the owners of Pulse Train and only Pat Molloy, Pulse Train’s MD, will be joining the existing Confirmit board. It will be business as usual on the Oslo Stock Exchange, where Confirmit launched as a public company last year.
Acquisitions are usually made either to grab market or innovative product. Achieving both in one hit is rarer – it is often too costly to contemplate, and the growth potential is less. On the face of it, this merger is a good fit. Both parties have innovative product lines and Confirmit has a significant customer base among enterprise users rather than research agencies, where Pulse Train has most of its customers. Confirmit has long aspired to provide multi-modal data collection without actually delivering it, which Pulse Train does par excellence with its revamped Bellview Fusion line. Tellingly, though, in Confirmit’s ten years of existence, it has achieved twice the headcount and roughly four times the annual revenues of Pulse Train, which celebrated its 30th birthday last year.
Though no MR company that has gone through a merger would describe the process as easy, it is particularly hard for technology companies, as the one thing you cannot do is merge the technologies. Ultimately, there will be winners and losers at the product level.
Of the entire range of software acquired by SPSS in the late 90’s, which included In2quest, Quancept, Quantum, Surveycraft and Verbastat, only Clementine is still under active development. SPSS’s strategy has been to start again – and the megalithic Dimensions initiative was the response. Despite an eight year slog, this product line is still incomplete, and worse, has failed to ignite the market.
The third, and often undervalued aspect of acquisition is to bring in fresh talent and experience. This, along with the need to bring in better-designed products, appears to have been the logic behind GMI’s recent acquisitions. But creating the right culture to allow innovation to continue under a different company regime is an enormous challenge. The experience at SPSS has been patchy – with almost no survivors from the firms it acquired. There could still be fall-out at GMI after its recent management turmoil.
For the moment, the future looks more exciting at Pulse Train under Confirmit’s wing. That is before the troublesome matter of bringing together two different development cultures – with Pulse Train’s development largely done in Russia – and two incompatible product lines. Already the clear number two in the industry, if the new company gets it right, it could eclipse SPSS in a few years. And even if it doesn’t, two big hitters jostling for supremacy is likely to give us some greatly improved software in the years to come.
Published in Research, the magazine of MRS (The Market Research Society), July 2007 , Issue 494.
© Copyright Meaning Ltd 2006. All rights reserved. Reproduced with permission.