IMS Health still on SaaS acquisition trail

Acquisition is likely to be one of the key trends in cloud services over the next few years, as businesses with an established position in their current markets look to bolster up their futures by acquiring those in related market sectors, but more importantly a good cloud service delivery capability.

It will be an interesting – and I suspect at times frustrating - period for many existing users of those Cloud Service Providers (CSPs) that become acquisition targets. The acquirer may be may well want to build on the service they provide, giving users the potential of a real benefit. Others, however , will be looking to use the expertise and knowledge base of cloud delivery to extend their own offerings, which could leave some existing users of those services somewhat out in the cold.

One such example where users in both camps will be watching closely, is where a major US-based health insurance business, IMS Health, has acquired Incential Software, an Software-as-a-Service (SaaS) company based in Raleigh, NC.

This is an addition to the growing stable of SaaS solutions IMS has already acquired. These include multi-channel CRM software 360 Vantage; relationship marketing platform,Appature; and Semantelli, which provides social media analytics for the global healthcare industry.

Incential delivers cloud-based services that integrate incentive compensation, data management and business intelligence applications that aim to provide a more effective, results-driven sales operation. For its part, IMS is looking to the acquisition to improve its sales performance management capabilities for life sciences organisations worldwide. The company already helps clients transform their commercial models to meet shifting marketplace demands by accelerating incentive compensation reporting and management.

IMS is aiming to pull together its existing healthcare information, analytics, managed services and technology with Incential’s suite of life sciences-optimised software.

Incential’s solutions become part of IMS One, the cloud-based commercial platform that combines IMS Health and third-party data for sales, marketing and performance management activities. The aim is that the combination gives organisations immediate access to information and services that support critical aspects of sales strategy, planning and implementation

“Through this acquisition, we’re bringing together a comprehensive set of evidence-based capabilities and services to transform the way our clients plan and execute their commercial programs,” said Lisa Kerber, vice president and general manager, Commercial Effectiveness Services, IMS Health.

The two issues here concern how health future business agility – or restriction, and for now only time will be the judge. For example, it depends on how healthcare centric Incential is, and what other market sectors might benefit from its capabilities. Incentivisation is a core component of the sales activity of every business, so it will be interesting to see if joining with IMS ultimately acts as a restriction as it misses other markets.

By the same token, by acquiring not just Incential but also 360 Vantage, Appature,and Semantelli, is IMS restricting its opportunity to change tactics or direction by using other services as market changes demand. It can do that but could then face a significant bill for acquisitions that are wasted. Would it now make more sense, particularly when SaaS services are involved, to simply partner with a service provider than  acquire it?