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 EndAwaiting 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 =)