ClickSoftware Acquires Xora: Real Potential to Grow MWM Market

Feb 18, 2014

ClickSoftware just announced that it is acquiring Xora for $14.7 million, a development that we think – if handled smartly – will be a winning proposition for the mobile workforce management (MWM) market in North America and beyond. (A market we expect to reach almost $3 billion in annual revenues by 2018.)

First, some background on the acquired party: Xora is a west coast company that began, over a decade ago, to develop field worker tracking applications to be used on mobile phones. These apps are cloud-based and offered on a subscription basis to business customers. Their per-user/per-month pricing model promised affordability and easy scalability to small companies with tight budgets. And providing a SaaS solution relieved SMB targets of day-to-day management and maintenance responsibilities. Anticipating that customer needs would progress beyond “dots on a map” employee location tracking, Xora enhanced its solutions to automate and optimize work processes. In late 2010, a new executive team came in to revitalize the flagship product. This team also recognized that MWM apps could be designed to significantly enhance actual customer engagement out in the field, and so they pushed and prodded businesses to look at MWM in a more expansive way. The result has been over 16,000 business customers and a consistent leadership position in the MWM market.

ClickSoftware has approached the MWM market from a different direction – as a desktop software leader in field service management that recognized the power of mobilizing its product. In Xora, it sees a number of complementary strengths that will propel the combined entity more aggressively along the MWM growth curve. The major advantage: ClickSoftware’s customer base tends to use on-premise solutions. Xora is comfortable in the cloud. Guess where mobile enterprise apps are heading? (See “Moving to the Cloud with Mobile Apps” – December 2013)

ClickSoftware is also anticipating the convergence of companies’ mobile resource management needs, seeing increased potential in Xora’s single web-based portal for managing not only workers and their tasks, but also keeping an eye on fleet vehicles and portable assets in the field. Xora also brings a strong set of wireless carrier partnerships to the table. And, of course, that SMB customer base and expertise.

ClickSoftware is no slouch when it comes to satisfying up-market needs, and it too has carrier relationships that could be enhanced with this acquisition. The company is also a major innovator, with its artificial intelligence, context-aware ClickButler software assistant serving as a prime example of how, with the right resources applied, MWM solutions can be made even more valuable and productive.

It should be noted that this acquisition continues a dynamic that is increasing in frequency – companies buying instant mobility expertise by acquiring a mobile-centric enterprise app developer. For MWM in particular, this deal shakes up a fairly static landscape that has averaged only one to two major consolidations annually – and only during the past couple of years. In 2012, SAP bought Syclo. In 2013, FleetCor acquired Telenav’s enterprise unit, and Pegasystems purchased Antenna Software. Now ClickSoftware has scooped up Xora.

We wonder if any of ClickSoftware’s field service management competitors might now look closely at Actsoft or Complete Innovations – two other worthy mobile workforce management application developers with close ties to major North American wireless carriers.

Of course, it’s easy to speculate about the potential downside of this consolidation trend. Marketplace competition could decrease. As a result, prices might increase. There might be too much of a culture shock for the acquired employees, leading to an exodus of mobile talent instead of an expansion. There may be too long of a technological pause as the two companies integrate. The tendency to innovate may dry up as people and roadmaps are absorbed into the parent company.

ClickSoftware and Xora seem to have strong teams that can avoid these potential pitfalls. Based on past interviews with executives in both companies, the benefits of this deal won’t rest solely on leveraging complementary strengths at the product, target market, and channel levels. Success will also be grounded in the cultural strengths these companies share – with their mutual emphasis on listening to the customer, thinking strategically, and constantly innovating.

Jeanine Sterling


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