Changepoint Set Free to Test Global Markets, Cloud Offerings

G00261758

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Summary

Spun off from Compuware, Changepoint has new product and distribution opportunities. The challenge will be re-energizing the product and gaining presence in the faster-growing parts of the project and portfolio management market.

News Analysis

Event

On 8 January 2014, Compuware announced an agreement for Marlin Equity Partner to acquire its Changepoint, Uniface and Professional Services business units for $160 million. Changepoint will operate as a separate company.

Analysis

Changepoint’s current customers should see few changes in the short or medium term, since all three business units have operated with separate financials for several years. A dedicated Changepoint sales force was re-established several years ago and remains intact, as does the rest of the organization.

Changepoint is a well-established presence in the project and portfolio management (PPM) market, but its activities had been constrained by Compuware’s focus on other issues. The price reflects Compuware’s eagerness to restructure its business. This acquisition by a funding company is part of an ongoing trend in the PPM space and signifies continued maturity in the market. Having now been acquired as a going concern, Changepoint will likely be more nimble in product development and forming important partnerships. Changepoint made little use of Compuware’s separate professional services business unit, relying instead on its own service and support group. New service partnerships may open secondary marketing channels.

In the long term, this transaction opens possibilities of changes in product investment, product road maps, pricing and distribution to respond to client demand for software-as-a-service (SaaS) based offerings or other opportunities. Specifically, Changepoint may be able to further test additional global markets, building on some success in in Australia and Brazil, where it has recently enjoyed a few very large deals but otherwise has had scant presence.

One challenge facing the newly independent Changepoint is that it operates in the slower-growing, on-premises portion of the PPM market — where it has been a leader — compared to the smaller but faster-growing SaaS (e.g., cloud-based and hosted) segments. Presently, Changepoint’s hosted offerings comprise some 25% of its license revenue. To succeed, Marlin Equity Partners will need to commit sufficient resources to enable Changepoint to convert its advantages in the traditional market to the faster-growing SaaS segments.

Recommendations

  • Current Changepoint customers: Do not expect any near-term disruption, but expect, and press for, renewed product development energy in the medium term. Assess whether the perceived benefit of Compuware’s total size was important to your buyers.

  • Prospective Changepoint customers: View this acquisition as a short-term positive development for Changepoint.

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