UtiliPoint IssueAlert
Sept 24, 2007

By: Jon Brock and Patrick Reames

Ventyx Broadens its Reach - Acquires NewEnergy Associates

As our readers may know, Ventyx was formed in January 2007 through the merger of Indus and MDSI, backed by venture company Vista Equity Partners. The combination brought together Indus’ service delivery management solutions with MDSI’s mobile workforce management solutions.

At the time of the company’s formation, Greg Dukat, Ventyx’s President, indicated that they would pursue a growth strategy that included the acquisition of companies/solutions that would further their strategy of combining “complementary technologies and build a platform for growth” with a utility centric focus. Putting force behind his words, Ventyx announced the acquisition of Global Energy Decisions in June of this year. The Global Energy Decisions (GED) acquisition added utility industry solutions for generation asset and portfolio optimization, energy trading and risk management, schedule management, price and load forecasting, maintenance optimization, resource planning, fuel budgeting, plant betterment and environmental compliance analysis. In addition, to the utility/generation solutions, GED brought with it substantial offerings in data, data analysis and interpretation, and consulting and advisory services.

As a follow on to the GED acquisition, Ventyx announced two weeks ago they have acquired NewEnergy Associates, headquartered in Atlanta (home of Ventyx) and previously held by Siemens Power Generation. According to Ventyx, in addition to a significant customer base including hundreds of client companies in 14 countries, this acquisition brings additional solutions for planning, forecasting, operations and trading, and a broad range of consulting services.

NewEnergy Associates (NEA) will be merged with GED and will be headed by Deane Price, formally President of NEA.

Vertically Focused Strategy

UtiliPoint recently had the pleasure of interviewing both Deane Price and Greg Dukat related to the recent acquisitions. As elaborated by Mr. Dukat, the company continues to pursue a vertically focused strategy, one that now places Ventyx as the leader in providing software solutions to utilities. The breadth of their offerings allows them to provide solutions covering most of the vital processes of generators and utilities - from generator asset management and optimization through trading and back office functions, including their capabilities in “Service Delivery Management” solutions which enable utilities to optimize the management of their customers, workforce, spare parts inventory, equipment, tools and documentation.

Ventyx’s capabilities in customer care, inventory management, and service optimization, now combined with the more production and market oriented suite of products from GED and NEA have placed them in a unique position in the market. Clearly the company has a solution set that could allow them to be a “sole sourced” vendor for the majority of a utility’s operational needs. Ultimately one of the determinates of success for these acquisitions will be dependant upon the company’s ability to cross sell solutions to its combined customer bases and achieve that “sole sourced” status.

The NEA acquisition is not without some complications however. While they have most certainly picked up additional and complementary functionality with the acquisition, they have also acquired many products that overlap with those of the GED family.

ETRM Perspective

While NEA and GED both serve asset heavy power companies with their respective ETRM products, Monaco and EnerPrise, NEA has also seen success selling Monoco to gas trading and marketing organizations, a market that hasn’t been covered by EnerPrise. Additionally, NEA’s Sendout product, a natural gas supply planning and strategy solution, has been used by “more than 100 energy companies” including many pipelines. From the GED perspective, their EnerPrise solution is a highly regarded product in its market, and is an industry leader in risk management for generation asset owners, having helped pioneer the concepts of profit at risk for generation asset portfolios. Given comparative strengths of the two companies’ ETRM offerings, the reconciliation of these products will be challenging.

For clients of vendors that are a party to a merger or acquisition with competitor, these events can be unsettling. In order to realize the full value of the acquisition, Ventyx will need to undergo that reconciliation process - reducing the number of products on offer and transitioning some clients from products that will be “end of life’d” to those that will continue on. Given the number of overlapping and competitive products, this will not be a quick process for the company. ETRM solutions are particularly challenging both to reconcile and for which to develop a “go forward plan” given their business critical nature, system of record status, and scope of functionality.

In conversations with UtiliPoint, Ventyx’s management acknowledges the challenges going forward. They have clearly stated their intention to continue to support the newly combined client base and have committed to honoring all existing license and maintenance agreements.

Even in light of the challenges ahead, the company leadership is optimistic that their clients will be a net beneficiary in this latest transaction through access to a broader range of products and services from a single vendor. Additionally, they believe that they can leverage the best of their ETRM product offerings and provide significant new capabilities beyond that of any current product.

Retail Perspective

Ventyx gained CustomerSuite from Indus when it merged with MDSI. CustomerSuite includes functionality that consists of:

- Customer Information
- Service Orders
- Contact
- Service Levels
- Call Center
- Web Portals
- Billing
- Payments
- Reporting

Synergies that existed with that merger (integrating mobile workforce solutions from MDSI with the customer information system from Indus) will now have new opportunities with the addition of NEA. NEA has a product suite known as RetailOffice. It is used across the North American and European retail markets for:

- Load and Revenue Forecasting
- Contract Pricing and Quote Management
- Supply Management and Position Reporting
- Scheduling, Settlement, and Market Communications
- Load Profiling, Aggregation, and Meter Data Management
- Wholesale and Complex Billing
- Integrated Solutions and Process Automation

NEA’s RetailOffice brings more of an unregulated retailer focus to the CustomerSuite side of Ventyx and is viewed by company management as having good synergies moving forward.

Defining Success

Ultimately Ventyx’s acquisition strategy will be judged on several fronts: success in retaining existing clients of GED and NEA, success in developing and delivering on a product strategy that fully leverages the best of each product family, achieving operational efficiencies by eliminating any redundancies within the newly formed Ventyx family, and finally, successfully cross-selling their wide ranging products within individual customers in their very large client base.

Based upon our conversations with the company’s management, we believe they have a very clear vision as to how to achieve each of these goals and have the skills and financial wherewithal to make it happen.

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