Tuesday, 20 October 2009

Maxima loses QAD distribution rights

(By Anthony Miller – Tuesday 20th October 2009 6:30pm). In a totally unexpected blow to mid-market software and services company Maxima, US-based manufacturing sector ERP player QAD has just announced it is to sever its relationship with Maxima from Feb next year and will service all UK clients itself. Maxima has been QAD’s sole mid-market UK channel for 23 years and is QAD’s largest channel partner worldwide. QAD already services larger UK ‘enterprise’ customers directly and is one of Maxima’s four key ERP partners (the others being Microsoft, SAP and Oracle).

The cost to Maxima is likely to be some £1.3m in lost profit this FY (to May ’10), representing over 15% of last year’s adjusted EBIT. The longer term impact is unclear, though executive chairman Kelvin Harrison told me he expects existing QAD implementation projects to continue, along with some support contracts. Just a couple of months ago Maxima announced a ‘major’ QAD contract with Scotland-based soft drinks manufacturer and distributor, AG Barr.

This news will come as a setback for Maxima’s new management team, especially following its recent upbeat trading statement (see Sales up at Maxima). Frankly, it makes you wonder what’s going on at QAD, as I understand Maxima is not the only partner to have come under the cosh. If QAD believes it can service mid-market clients from its existing ‘enterprise’ sales and support base, it may be in for a bit of a rude awakening. More likely, these are desperate measures in response to pressures from Microsoft squeezing QAD from below and Oracle and SAP squeezing them from above. It goes to show yet again, how very tough it is out there in the mid-market – both for software players like QAD, and systems integrators like Maxima.

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