Danish rivals roll on together

Arch-rival Danish ERP companies Damgaard and Navision have finally buried the hatchet and announced plans to merge. The revelations made this week surprised many in the industry, and have left the companies' Australian channel partners wondering what the future may hold.

The new company, to be called NavisionDamgaard, will have combined revenues of around $265 million and marries two significant forces in the mid-market ERP space. Both companies intend to retain core product lines including Damgaard's Axapta, XAL and C5 products as well as Navision's Solutions range.

From a product perspective, Damgaard is being positioned in the mid-to-high enterprise market with strengths in CRM and e-commerce; a bonus for Navision partners. Navision on the other hand scales from five to 300 users and is seen as a sales-driven organisation according to financial reports in Europe. More than 80 per cent of Navision's revenues come from international sales.

Despite the sentiment from some analysts that Navision and Damgaard have very different corporate cultures which could lead to problems, the announcement follows a raft of consolidation occurring in the enterprise software market. A high number of vendors suffered poor results this year and overseas analysts believe the consolidation trend will continue, such as applications vendor Invensys acquiring Baan earlier this year.

Navision has taken a 72 per cent stake in Damgaard, which in turn has taken a 28 per cent stake in Navision. Damgaard's Preben Damgaard and Navision's Jesper Balser will assume the role of joint CEO.

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