Flying Solo No More: Accrue Intends to Acquire Pilot Software


Archived Published: 16 August 2000 ID: G0092052

Analyst(s):

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Summary

Accrue Software is poised to become the latest and likely last in a string of owners of Pilot Software. Since this acquisition would likely mean an end to new discreet Pilot products, Pilot customers that have not already done so should be considering an exit strategy.

News Analysis

Event

On 10 August 2000, Accrue, a clickstream analysis vendor, announced its intent to acquire Pilot, which provides business intelligence applications. No terms were released except that the deal will be a stock swap.

Analysis

When the deal is finalized, Accrue will become the latest (and likely last — 0.9 probability) in a series of owners of EIS pioneer Pilot, which was created in 1983, acquired by Dun & Bradstreet (D&B) in 1994, ceded to D&B spinoff Cognizant in 1996 and then sold to Platinum Equity Holdings in 1997. Throughout these ownership changes, Pilot — and its market share — contracted significantly (as shown by a peak of 350 employees in the mid-1990s, which fell to 200 employees after Platinum Equity took control, and was at 65 when the Accrue deal was announced).

Accrue will expand its channels (especially in Asia) by acquiring access to Pilot's 50 distributors and system integrators worldwide. In addition, Accrue adds revenue from some well-known customers (e.g., DaimlerChrysler and Ingersoll-Rand) in diverse markets worldwide, which provide Accrue additional qualified selling opportunities. By acquiring Pilot, we believe that Accrue gains some solid albeit dated technology. Given the already diminished Pilot staff and the likelihood of some attrition related to the change in ownership, we believe that Accrue will gain limited personnel expertise.

Overall, this deal is good for Accrue and its customers. However, Accrue customers should not expect the first general-release-level Pilot functionality in Accrue products until year-end 2000 or early 2001.

For Pilot customers, this deal provides little solace. Since 1997, Gartner research recommended only tactical purchases and deployments of Pilot products; we have also strongly urged Pilot customers to plan an exit strategy. Pilot customers should plan for no further product enhancements as functionality will likely be folded into Accrue products. Direct support will likely continue for a short-term period. However, its effectiveness will decrease as resources are focused more on Accrue products; by year-end 2001, we believe that Accrue will likely no longer directly support Pilot products. Given these heightened risk factors, Pilot customers that have not already done so should consider an exit strategy — which may include a transition to Accrue.

Analytical Source: Howard Dresner, Strategic Data Management

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