By Vincent Brault, SVP of Product & Innovation
The IP software and services market has gone red-hot recently with two major shake-ups in the industry in the past few months. This month was marked by the merger of two of the largest players in the IP market, CPA and ipan, with the combined entity now offering dozens of overlapping IP software platforms and services.
Here at Anaqua, we’re receiving inquiries from the market including customers of the merged companies. Acquisition targets are also reaching out to understand what this industry consolidation means for them.
To best address some of these concerns, below are four critical considerations we suggest every IP and business professional should ask herself or himself as we witness these developments unfold in the industry.
1. Is your IP management provider’s organizational success aligned with that of your organization?
In a software-driven business model, scale favors both provider and clients; the greater the number of customers and revenue, the more can be spent on R&D, driving customer satisfaction and client growth alike. It’s a virtuous circle. As a software-driven business model, Anaqua understands the value behind innovation investments and contributes more than $10 million per year on R&D to continuously enhance our flagship IP Management software platform. For example, Anaqua offers services such as docketing, and annuity and renewal payments, which are anchored in our software to provide a seamless user experience for our customers.
Does the same dynamic apply to a services-led business that’s aggressively acquiring market share? Will services clients benefit from the economies of scale and the increased volume? Will savings be passed on to the clients?
2. Is your IP software platform going to be a winner or loser amid consolidation?
In any industry, the onset of a merger will raise uncertainties. It’s only normal for those involved – whether employee or customer – to ask questions about the future of the company and how it will affect them. Customers will need to know potential implications or changes to current platforms, products, support or services. Overall, it comes down to one question. Will the business’ platform win and thrive from this consolidation?
Any partnerships must be strategic and most importantly, they must contribute to the innovation of one singular, smart, platform that provides the best possible IP management solution for the industry, not the most. At Anaqua, we partner with clients in a structured manner to define our product roadmap, which in turn guides our acquisition strategy, targeting complementary capabilities to drive client value.
What is the future of these various, acquired platforms? What does the merger mean for implementations, maintenance, and employee continuity? Does your provider have the resources to give each of the 20+ products the focus each deserves?
3. Does your provider have a history and track record of consistent innovation? Is your provider helping IP drive business success?
Throughout the history of IP software, we have seen a number of notable acquisitions including Memotech, Inprotech, FoundationIP, First to File, IP Forecaster, Ipendo, Innography and others by CPA Global; Unycom, IPfolio, and IPSS by ipan and AcclaimIP, Patent River and Lecorpio by Anaqua. While mergers and acquisitions are a part of every industry, as a customer it’s essential to understand the reasons behind these decisions. Consider asking your provider whether an imminent event is to increase market share or drive innovation.
When asked in 2018 what they wanted most from their IP solutions provider, CPA clients responded that their number one priority (50% of the votes) is the consistent quality of experience across different products (CPA website, 2/1/19). Anaqua’s clients have told us the same and we are proud of the accelerated innovation we continue to deliver following each of our acquisitions or mergers. We know it’s not easy – it takes dedicated focus and vision to bring different solutions together into a single, coherent platform. In ANAQUA9 and now with AQX, we continue to offer truly seamlessly integrated analytics from AcclaimIP and Patent River, spend management from Lecorpio, renewals and annuities execution and tech-enabled services such as docketing and data validation on a natively integrated global platform.
In addition to integration for the benefit of improved IP operational execution, our innovations at Anaqua also reflect the fact that strong operational capabilities alone are no longer sufficient for a modern IP-intensive organization. IP is no longer just a legal function, it is a business function that impacts the entire organization. The most innovative IP organizations require IP platforms and integrated services to drive IP and business value. As previously mentioned, “with AQX, we are addressing the unmet needs of IP and business executives by providing a software platform that gives corporations a competitive edge and helps law firms differentiate themselves and achieve business success.”
Has the level of innovation in your IP system faded over time or accelerated? Have the key thought leaders and visionaries left the business? Is your IP system helping you more effectively manage your IP? Is your IP system helping you deliver business results?
4. Is your IP solutions provider focused on its customers or its own internal dynamics?
In my experience, M&A transactions can be disruptive whether they are large M&A transactions or a high volume of small M&A transactions. Transactions inevitably lead to a lot of disruption and organizational changes divert focus away from customers and innovation. At Anaqua, we do not believe in pursuing a land grab strategy. We pursue M&A strategically and focus on completing and integrating each event in order to maintain focus on our customers.
Count up the number of M&A events your IP provider has pursued in aggregate over the past few years. Have these acquisitions been integrated? Are employees aligned and productive? Has overlap been resolved?
Time will tell how all of the M&A events in the IP industry will impact IP practitioners and end-customers. IP-centric organizations tend to stay with the same provider for a long time, due in large part to the fact that switching software is difficult and until recently the reasons to move have been limited. The recent mergers and the rapidly widening value gap between traditional IPMS products and the next generation of IP business platforms is a great catalyst for organizations to upgrade their IP solutions.
All in all, a great opportunity at value creation for innovative IP organizations and leading IP software providers alike; an exciting beginning to 2019! We would love to talk with you as you navigate the changing IP industry landscape.