Archive for February, 2009

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Software Insider Index™ (SII): SII Top 30 Enterprise Business Apps Vendors™ & SII Top SaaS Business Apps Vendors™

Published on February 26, 2009 by R "Ray" Wang

Now with most of the craziness of Q4 behind us, its time to unveil the Software Insider Indices:

  1. SII Top 30 Enterprise Business Apps Vendors provides a snapshot of an ongoing vendor ranking by revenue.  Some vendors are private and of course not on this list, unless there’s a reasonable estimate.
  2. SII Top 5 SaaS Business Apps Vendors. provides a snapshot of an ongoing vendor ranking by revenue.  Some vendors are private and of course not on this list, unless there’s a reasonable estimate.

So drum roll please…

2008-sii-top-30-enterprise-business-apps-vendors-rev-23

Software Insider Index: Top 30 Enterprise Business Apps Vendors™

The 2008 SII® Top 30 Enterprise Business Apps Vendors™*

  1. SAP $14,689.9M (€11,567.0M)
  2. Oracle (Apps Revenue Only) $8,418.3M (est.)
  3. Computer Asssociates $3,248M
  4. Amdocs $3,162M
  5. Intuit $3,107M
  6. Infor $2,200M (est.)
  7. Sage Group (oct. fiscal year) $1,893.4M (£1,295.0)
  8. Microsoft Dynamics $1,154.5M (est.)
  9. SalesForce.com $1,076.8M
  10. Lawson $843.2M
  11. Agresso $500.4M (€ 393.5M)
  12. Epicor Software $477.8M
  13. Activant $432M (est.)
  14. JDA Software $390.3M
  15. IFS $383M (SKr 2,500M) (1USD = 6.58 SKr, average quarterly exchange rates)
  16. Exact Software $337.4M (€265.4M)
  17. Manhattan Associates $337.2M
  18. Ariba $337.1M
  19. Deltek $289.4M
  20. QAD $279.4M
  21. i2 $256.9M
  22. Glovia (A Fujitsu Company) $246M (est.)
  23. CDC Software $235M (est.)
  24. IBS Software $229.6M (SKr 2035M)
  25. Concur $220.4M
  26. Cincom $178M (est.)
  27. Taleo $167.7M
  28. NetSuite $152.5M
  29. RightNow $102.6M
  30. SoftBrands $99.7M

The 2008 SII® Top 5 SaaS Business Apps Vendors™*

  1. SalesForce.com $1,076.8M
  2. Concur $220.4M
  3. Ultimate Software $178.0M (added 2/26/2009 @ 17:17 GMT)
  4. Taleo $167.7M
  5. NetSuite $152.5M
  6. RightNow $102.6M

Your POV.

Am I missing a vendor?  Feel free to post your comments here or send me an email at rwang0 at gmail dot com .

* Not responsible for any math errors or erroneous revenue information.  Calendar year estimates based on the quarter nearest the calendar year.  Exchange rates as of February 25th, 2009 for vendors who have not published quarterly conversions.  Not responsible for currency flux.  Please read the quarterly filings yourself =)

Changes: March 12, 2009 converted IFS from $279.3 to $383M (SKr 2,500M)  using 1USD = 6.58 SKr, average quarterly exchange rates.  Ranking moved from 21 to 15.

Copyright © 2009 R Wang. All rights reserved.

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Quarterly Financial Tracker: Q4 CY 2008 SaaS Vendors Trump On-Premise Vendors In Quarterly Performance

Published on February 25, 2009 by R "Ray" Wang

The recession hit most vendors hard in the last quarter of 2008 as evidence by the dismal license revenue YoY comps.  Some exceptions include JDA (52.9%) with a strong presence in retail and Agresso with its growth in public sector (25.6%).  As vendors with perpetual license models hunker down for the pending drought, retention and possible growth of maintenance and service revenues is the key goal, though almost all vendors have put off any maintenance price increases as this would be in poor taste in a down economy.  Details below:

Major highlights in the 2008 Calendar Year  include:

  • Big double digit gains in YoY annual license revenue winners include:  JDA (52.9%) and Agresso (27.5%), Oracle (13.3%), SAP (12.9%), Epicor (11.2%), and QAD (10.0%).
  • Big gains in YoY subscription license revenue winners include: Concur (49.3%), SalesForce.com (43.8%), and NetSuite (40.5%), Taleo (31.1%), and Right Now (17.9%).

Major highlights in the Q4 Calendar Year of 2008 include:

  • Big gains in YoY quarterly license revenue winners include: SoftBrands (124.9%), JDA (52.9%) and Agresso (25.6%)
  • Double digit losses in YoY quarterly license revenue include: Epicor (-34.1%)Deltek (-27.2%), Manhattan (25.5%), Oracle (-15.2%), and Exact Software (-10.8%).
  • Double digit maintenance revenue winners include: Agresso (29.5%), Epicor (17.2%), IFS (13.6%), SAP (12.3%), and Oracle (11.7%).
  • Subscription revenue vendors (i.e. SaaS vendors and vendors with SaaS/OnDemand offerings and others with subscription services) continue to grow at breakneck paces with CA (55%), SAP -Subscription Revenue (39.6%), SalesForce.com (35.4%), Ariba (35.1%), Taleo (31.5%), NetSuite (30.5%), and Concur (21.5%), leading the charge in year over year quarterly revenue growth.

Enterprise Software Vendors with Perpetual License Revenues (YoY Q4 Calendar Year 2008 Comparisons)*

  • Agresso Software (2H 2008) – License up 25.6% to €37.7M/ Maintenance and support  up 29.5% to €84.7M/ Services up 31.6% to  €79.7M. 
    2008 Calendar Year End     – up 27.5% to € 393.5M/ $500.4M (1 USD = 0.786468 EUR)
  • CDC Software (2H 2008) – Awaiting Financial Reports.
    2008 Calendar Year End – Awaiting Financial Reports.
  • Deltek (FY Q4) - License down 27.2% to $19.8M / Maintenance and support down 1.8% to $21.9M / Services up 9.27% to $30.0M
    2008 Calendar Year End - up 4.0% to $289.4M
  • Epicor Software (FY Q4) - License down 34.1% to $25.2M /Maintenance and support up 17.2% to $48.5M / Services up 8.7% to $38.2M
    2008 Calendar Year End - up 11.2% to $477.8M
  • Exact Software (2H 2008) - License down 10.8% to €38.1M /Maintenance and support up 7.5% to €67.4M / Services up 17.2% to €29.7M
    2008 Calendar Year End - up 5.3% to €265.4M/ $337.4M (1 USD = 0.786468 EUR)
  • i2 (FY Q4)- License down 2.5% to $12.1M/ Maintenance and support up 6.3% to $30.9M / Services up 5.1% at $21.9M
    2008 Calendar Year End - flat at $256.9M
  • IFS (FY Q4) - License down 2.0% to SKr 145M /Maintenance and support up 13.6% to SKr 200.0M / Services revenue up 10.8% to SKr 391.0M
    2008 Calendar Year End - up 7.0% to SKr 2,500M/ $279.3M ( 1 USD = 8.94953 SEK)
  • Intuit (FY Q2) - Quick Books revenue up 5.4% to $1754.M
    2008 Calendar Year End - Quick Books revenue flat at $256.9M
  • JDA Software (FY Q4) - License up 52.9% to $34.3M/ Maintenance and support down 6.4% to $44.0M / Services revenue down 3.9% to $25.1M
    2008 Calendar Year End - up 7.87% to $390.3M
  • Lawson Software (FY Q2) – License down 8.9% to $30.1M/ Maintenance and support up 6.4% to $90.1M / Services revenue down 14.6% to $86.2M
    2008 Calendar Year End - up 4.1% to $843.2M
  • Manhattan Associates (FY Q4) - License down 25.5% to $13.8M/ Maintenance and support down 5.7% to $53.8M / Services revenue down 14.6% to $8.0M
    2008 Calendar Year End - down 0.1% to $337.2M
  • Oracle (Apps Estimate) (FY Q2) - License down 15.2% to $469.0M/ Maintenance and support up 11.7% to $1,095.0M / Services (factored as .33 of total services rev) up 13.17% to $189.0M
    2008 Calendar Year End - up 13.29% to $8,418.3M
  • Progress Software (FY Q4) - License up 4.31% to $13.8M/ Maintenance and support up 7.4% to $72.4M / Services revenue down 13.0% to $13.6M
    2008 Calendar Year End - up 5.0% to $518.3M
  • QAD (FY Q3) - License down 7% to $13.1M / Maintenance and support up 1.2% to $32.7M/ Services up 8.9% to $22M
    2008 Calendar Year End - up 10.0% to $279.4M
  • SAP (FY Q4)- License down 6.5% to €1,323.0M /Maintenance and support up 12.3% to €1,129.0M / Services up 8.6% to €808.0M
    2008 Calendar Year End - up 12.9% to €11,567.0M/ $14,689.9M (1 USD = 0.786468 EUR)
  • SoftBrands (FY Q3) - License up 124.9% to $6.7M / Maintenance and support down 4.57% to $12.9M/ Services down 0.4% to $4.9M
    2008 Calendar Year End - up 10.0% to $279.4M

Enterprise Software Vendors with Subscription Revenues (YoY Q4 Calendar Year Comparisions)*

  • Ariba (FY Q4) – Subscriptions up 35.1% to $54.1M / Services down 13.4% to $32.0M. 
    2008 Calendar Year End -     up 11.8% to $337.1M
  • CA (FY Q3)- Subscriptions up 55% to $1.393B / Software fees down 30% to $15M / Services down 27% to $74M. 
    2008 Calendar Year End -     up 1.75% to $3,248M
  • Concur (FY Q1) - Subscriptions up 21.5% to $56.6M/ Services down 28.7% to $2.0M. 
    2008 Calendar Year End -     up 49.3% to $220.4M
  • NetSuite (FY Q4) - Subscriptions up 30.5% to $41.4M
    2008 Calendar Year End - up 40.5% to $152.5M
  • Oracle (On Demand) (FY Q2) – Subscriptions up 13.2% to $189.0M
    2008 Calendar Year End - up 21.7% to $752.0M
  • Right Now (FY Q4) - Subscriptions up 12.5% to $26.5M
    2008 Calendar Year End - up 17.9% to$102.6M
  • SalesForce.com (FY Q4) - Subscriptions up 35.4% to $266.1M/ Services up 15.1% to $23.5M
    2008 Calendar Year End - up 43.8% to $1,076.8M
  • SAP (Subscription Revenues) (FY Q4) - Subscriptions up 39.6% to €74M,
    2008 Calendar Year End - up 41.7% to €258M /$327.6M (1 USD = 0.786468 EUR)
  • Taleo (FY Q4) - Awaiting Financial Restatement of Earnings Estimates – Subscriptions up 31.5% to $37.4M /Sevices down 40.8% to $3.6M
    2008 Calendar Year End - Awaiting Financial Restatement of Earnings Estimates – up 31.1% to $167.7M

The bottom line – on premise vendors will continue to be threatened by SaaS models in a recession

Despite fierce Q4 discounting for on-premise software, many prospects and existing customers continue to explore SaaS options.  The continued explosive growth demonstrates sustaining and growing interest in the SaaS model.  However, on premise vendors are not down for the count and can combat the effects of SaaS by offering hosting, vendor led financing, lower cost of ownership, increased flexibility, and right sized maintenance.  However, the current recession may be the catalyst to bring SaaS pricing and delivery models into the mainstream.

Your POV.

Are you ready to take the SaaS plunge this year?  Am I missing a vendor?  Feel free to post your comments here or send me an email at rwang0 at gmail dot com .

* Not responsible for any math errors or erroneous revenue information.  Calendar year estimates based on the quarter nearest the calendar year.  Exchange rates as of February 25th, 2009.  Not responsible for currency flux.  Please read the quarterly filings yourself =)

Copyright © 2009 R Wang. All rights reserved.

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Trends: Actions Speak Louder Than Words in Customer Loyalty

Published on by Esteban Kolsky

Let me ask you a question: would you recommend me to your friends and family?  Yes, that question… the “L” question.  If you say YES, then you are loyal.  If you say NO, then you are not.  That is an abusive oversimplification of a very, very complex topic – but one that we are able to make mostly because we don’t really understand Loyalty and we do think that everything in this world should be measured.  That question (and its twin sister, “would you use the service or product again?”) supposedly measure loyalty.  Why, there is even an entire methodology (NPS or Net Promoter Score) devoted to the study of the answer of those questions.

Alas, if you have my previous entry on loyalty you know that I think that Loyalty is so badly used in organizations that it is useless.  Thus, asking those questions will not yield any insight into the loyalty of your customers, rather yield some insight into your customers’ ability to answer questions one way – and act a different one.  I have not yet seen any proven correlation between answering those questions and being loyal (sorry Fred).

Now, let me turn the concept a little bit on its side.  Let’s say for the sake of argument you could measure loyalty.  Let’s say that you want to make sure that your customers would indeed recommend you to their friends and family, or even use the product or service again.  Would you really take their word at face value? or would you rather have some proof, some evidence that they will act as they say they will?  Yeah, thought so.

Here is the simple way to save yourself the money and not buy into the NPS hype and methodology.  Don’t believe your customers’ words, believe their actions.  Implement frequent shopper or user programs, adopt a referral program – and then see the value of your customers’ actions replace the empty words.  Reward your customers for using you frequently (remember, it costs ten times or more to get a new customer as it does to retain an existing one – use those savings for good).  Pay them, and their friends, for referring new people into your service or organizations.  Make it worth their time to be loyal – and they will.

What do you think? Take their words or their actions? Have you done this? Want to talk more about it? Leave me some comments or email me (ekolsky[at]evergance[dot]com).

Copyright © 2009 Esteban Kolsky/ R Wang. All rights reserved.

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Monday’s Musings: Five Programs Some Vendors Have Implemented To Help Clients In An Economic Recession

Published on February 23, 2009 by R "Ray" Wang

Almost every inquiry over the past 3 months has ended up with at least one question about what vendors are doing to help their clients amidst an economic recession.  As blogged in the October 12, 2008 posting on “5 Steps to Restoring Trust in the Vendor – Customer Relationship” the issue of credibility and trust remains at the forefront of today’s concerns.  So over the past 3 weeks, I’ve posed a question to 47 of my friends on the other side of the aisle, “What are you doing to make it easier?”  I also put a quick tweet out this past Saturday that got some great responses.   To protect the brave who shared with me their views and mask the software vendors they represent (when the program is not public), let me share with you the five major themes/programs in order of most frequent first:

  • Create better peer forums to share information (45/47). Almost every vendor surveyed has a program to improve the online support capabilities.  User generated content in peer forums tops the list of initiatives.  Other plans focus on sharing data on benchmarks, operational metrics, and best practices.
  • Renegotiate existing terms (23/47). Some vendors are helping clients meet the realities of the current market conditions. Big on the list is helping clients address shelf ware without repricing of contracts.  For clients who paid full maintenance on software that’s at least 4 years old, some vendors are offering to reduce up to 20% of the overall licenses not in use.  This leads to lower maintenance revenue but engenders good will among key clients.  Further, several vendors have allowed clients to apply credit towards another module as an alternative.
  • Offer more entry points to support options (17/47). The three pillars of software maintenance and support policies still apply.  However, several vendors are now offering more tiers of support as lower entry points.  Two vendors have finalized plans to offer just the bare bones legal and regulatory updates.  Other vendors have made it easier to come back with maintenance amnesty plans.
  • Assist with vendor financing (13/47). Clients seek access to financing, especially many in the mid-market who’s credit lines have been zapped.  Microsoft has led the charge by providing 0% financing for its Microsoft Dynamics ERP and Microsoft Dynamics CRM Customers.  Other vendors such as IBM, Infor, Oracle, SAP, Sage also offer vendor led financing programs that include hardware, implementation, training, and other services.
  • Lower cost of usage and ownership (5/47). Though tops on the list as a conceptual practice, most vendors will need to roll out such initiatives over the next 24 months.  A few notable exceptions include Agresso with its VITA architecture which allows customers to rapidly make business and UI changes, Microsoft Dynamics customers who report back significantly lowered implementation and training costs compared to most vendors, and Epicor customers who report significant productivity gains with Service Connect and the EPM analytics in its new Epicor 9 release.

The bottom line.

The good news is that some vendors have been listening to their customers about what they need and have put the motions in place to do the right thing.  However, the bad news -we still hear from many customers about vendors behaving badly by blocking access to third party contract negotiation support, third party maintenance, and training on products.  For those vendors who have taken a hard line on any or most of these programs, your customers know who you are and shame on you!  More on access to training in a future post!

Your POV.

If you’re a client, what’s missing?  As a vendor what steps have you taken to address this issue? Will you be able to convince your board and management to make the requisite changes.  Post a comment or drop me a line at rwang0 at gmail dot com.

Copyright © 2009 R Wang. All rights reserved.

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Speaking Engagement: HyPerformix SAP Webcast featuring Forrester Research

Published on February 22, 2009 by R "Ray" Wang

Top Cost Containment Strategies for SAP Environments
Thursday, March 5, 2009 (2:00PM – 3:00PM CST)

Presenters:

  • R “Ray” Wang, Vice President, Principal Analyst, Forrester Research
  • Bruce Milne, Vice President, Products and Marketing, HyPerformix

Join Forrester Research and HyPerformix for this webcast to better understand economic strategies that SAP operations teams are using to cut costs, improve performance and mitigate risk.

CIOs are reprioritizing business projects, reducing short-term costs and looking for ways to optimize IT spending. The current global recession challenges enterprises to tightly align IT operations and strategies with relevant business needs.

In today’s economic climate you need to:

  • Find creative ways to cut OPEX in IT
  • Make informed decisions about IT spending that you can justify and validate
  • Choose wisely when selecting technologies to support your business plans

The goal: Find ways to optimize existing investments in applications and infrastructure in order to not only save money, but to find money as potential sources for innovation.

REGISTER

Catch the replay (Added March 13, 2009 )

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Trends: What Can Software Vendors Do To Reduce The Cost of Ownership?

Published on February 21, 2009 by R "Ray" Wang

So as I’m thinking about what to write for this week’s Monday’s Musings, I thought I’d poll the twitter universe on what software vendors could do to make things easier during the recession.  Here’s the current twitter stream of thought and thanks to all of you who emailed!  (last update 11:26 am GMT – 8:00):

Photo_7_normal
rwang0: Contemplating what software vendors can do to work with customers to reduce the cost of ownership in a recession. Any ideas?
about 1 hour ago from web · Reply · View Tweet
Copyright © 2009 R Wang. All rights reserved.

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Friday’s Feature: Snapshots In Enterprise 2.0 UX/UI – Epicor 9

Published on February 20, 2009 by R "Ray" Wang

Usability and User Experience Matter in Enterprise 2.0 Apps

Welcome to the third in a series of Friday’s Features showcasing the latest and greatest in enterprise apps usability. Many ERP software vendors including Epicor, IFS, Infor, Lawson, Microsoft Dynamics, and Syspro have made significant progress in improving usability as they progress to Enterprise 2.0 apps. As mentioned in a December 29th, 2008 post, customer expectations for Enterprise 2.0 apps include users rich user experiences, actionable insight, and business process orientation. The impact of overall user experience and user interaction often tie back to seven key Enterprise 2.0 characteristics:

  1. Richer user experiences - role based scenarios across various usability paradigms
  2. Business process orientation – support for end to end business processes
  3. Configurable change – designing with flexible models and rules instead of customizations
  4. Actionable insight – pulling all the key information to make a decision in the context of business process and user role
  5. Collaboration – providing secure private interactions and open and innovative connection with stakeholders
  6. Intelligent response – responding to contextual models and business events
  7. Hybrid deployment – deploying all models from on-premise, hosted, instance virtualization, multi-tenant SaaS, and cloud based BPO.

Part 3: Epicor Delivers A Broad Range of User Experiences Creating Choice and Flexibility

Epicor announced Epicor 9 on October 20, 2008 at their annual Perspectives user conference and made available the product in GA on December 8, 2008. Built on Epicor Internet Component Environment (ICE) 2.0, this foundational architecture provides users with Web 2.0 capabilities that support application to application integration and business to business collaboration. Epicor 9 serves up the client code and application business logic as self-describing business services. Here are some key UX/UI highlights:

  • Role based dashboards provide actionable insight. Users are treated to a series of role based interactive dashboards.  Dashboards take advantage of Microsoft UI metaphors such as the outlook navigation pane, rbbons. Users can drill in data, export to excel, make changes, and come back to the same screens.   Out of the box, Epicor delivers 250+ key performance indicators (KPIs).
  • Epicor Everywhere Framework delivers a consistent user experience. Regardless of the user interface, customization and user personalization remains intact because everything starts from the same meta data.  Consequently, Epicor 9 can run on a C#.NET Smart Client, any web client, and mobile devices on platforms such as Blackberry, Windows Mobile, Symbian, and Apple iPhone
  • Epicor Information Worker integrates with Microsoft Office technologies.  Information worker usability leverages Office Business Applications.   Users improve access to business data through this desktop productivity solution and can work in native applications such as Outlook, Word, and Excel.

Software Insiders Point of View Photo Stream (click image for details)

(Source: Epicor )

Your POV.

Do you like how your apps UI currently look? Will user experience lead to cost savings for you? Is this enough to make you want to switch? What do you think of Epicor’s UI? Post your thoughts or send me a private email to rwang0@gmail.com.

Friday’s Feature: Snapshots in Enterprise 2.0 UX/UI

  1. Epicor 9
  2. Eshbel Priority 13
  3. IFS Applications 7.5
  4. Lawson SmartOffice 9.0x
  5. Microsoft Dynamics AX and NAV

Next Friday’s Feature: Lawson SmartOffice

Copyright © 2009 R Wang. All rights reserved.

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