Posts Tagged ‘Exact Software’

Research Summary: Best Practices – The Case For Two-Tier ERP

Forward And Commentary

Legacy optimization remains a key component for funding future innovation.  Two-tier ERP emerges as one strategy to optimize existing systems while adding innovation.  The report capitalizes on the recent Software Insider survey of 235 companies looking at future strategies.

A. Introduction

Organizations continue to face an onslaught of business requirements that their existing ERP systems can no longer address.  Stuck in the past century, these ERP systems are expensive to run, difficult to upgrade, and impossible to modify for today’s fast changing requirements.  Two-tier ERP has emerged as a strategy to enable legacy optimization while reinvigorating the organization’s existing ERP systems.

B. Research Findings

Two-tier ERP refers to a business and technology strategy that enables organizations to keep existing ERP systems at the corporate level while empowering divisions or business units to innovate with a second ERP system.  Consequently, two-tier ERP deployments continue to gain favor.  Why? Organizations must optimize legacy systems while delivering on business value.  In fact, in a recent Constellation Research survey, 48% of respondents indicated that they are considering at two-tier ERP strategy (see Figure 1).  These results reflect a 27-point increase from 2009.

Figure 1.  Two-Tier ERP Growing In Popularity As A Key Strategy

While today’s two-tier strategies mostly involve on-premises solutions, cloud based solutions will gain favor over the next 18 to 24 months because of their rapid deployment capabilities, constant innovation qualities, and subscription pricing.  Organizations challenged by diverse lines of business, multiple localization requirements, or needs to phase in legacy system modernization will find a two-tier ERP strategy one that can reduce costs and provide better business value than a one-size-fits-all solution.  Whether SaaS, on-premises, or hybrid, a two-tier ERP strategy will reduce costs, meet new business requirements, and provide better business value. More…

Quarterly Financial Tracker: Q2 CY 2010 – SaaS Vendors Still Show Massive YoY Growth

The majority of 22 publicly traded software vendors demonstrated solid year-over-year (YoY) quarterly growth from Q2 2009 (see Figure 1).   Every SaaS vendor in the Software Insider Index® drove 14% to 26% growth (see Figure 2) despite the pick up in on-premises license sales.  Highlights for the 2010 CY Q2 2010 results:

On-Premises Trends

  • JDA Software (59.19%) and Manhattan Associates (32.93%) continue to ride the CPG, retail, and supply chain investment wave.  Manhattan solidified a significant turnaround in 2 quarters of growth.
  • Large mega vendor bellwethers Oracle (12.95%) and SAP (12.34%) showed significant double digit growth.  SAP’s license gains of 17.31% demonstrate a turnaround in the sales team.  All indications point to BOBJ and the non-EMEA regions driving sales growth.
  • The SMB vendors shared mixed results with Epicor (8.68%), Lawson (5.81%), and CDC Software (3.92%) continuing to grow key license revenues.  While IFS total revenue gains were low in the 1.40%, IFS grew license revenue by a whopping 19.77%.
  • Unfortunately, other SMB vendors Exact (-4.99%) and Deltek (-7.07%) showed negative revenue momentum.  These vendors not only lost ground in license revenue but also saw declines in traditionally stable maintenance revenue.
  • Maintenance fee growth remains healthy for most vendors as new programs to show value to customers gain traction.

SaaS Trends

  • SaaS vendors continue to grow in mid to high double digit growth rates for subscription revenue. SuccessFactors (26.81%), (24.78%), and Concur (20.49%) moved past 20% year over year quarterly growth.
  • Ariba ($93.2M) nears the $100M per quarter revenue benchmark as Blackboard ($101.5M) continues to grow from this achievement in Q1 2010.
  • RightNow (19.58%), NetSuite (16.83%), Ultimate Software (15.67%), and Taleo (14.63%) all showed solid quarters of growth, though these growth percentages show slight declines.
Figure 1.  Software Insider Index® On Premise Vendors: Q2 CY 2010

(Right click to view full image)
Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Software Insider Index™ (SII): 2009 SII Top 35 Enterprise Business Apps Vendors™

2009 Results In Major Revenue Declines For On Premise And Officially The Year Of SaaS

A review of last year’s financial performance should erase any doubts about the viability of SaaS as a deployment option and a business model.   Traditional on-premise business apps vendors took the brunt of the beating earlier in the year but have slowly recovered.   This year’s Software Insider Index™ (SII) highlights two major themes:

  • Legacy On-Premise Vendors Retain Operating Margins But Lose Revenue Share. Almost every on-premise software vendor lost revenue on a year-over-year (YoY) basis in 2009 (see Figure 1).  IFS (3.87%) and SAS Institute (2.21%) grew in the midst of the financial onslaught.  SAP is still double the size of Oracle in apps revenue!  Vendors such as QAD (-31.42%) and Manhattan Associates (-26.84%)saw the worst YoY declines (see Figure 2).  Most vendors relied on their maintenance and support to bolster their revenues. For example, CDC, Epicor, Exact, Lawson, Manhattan, Oracle, QAD, and SAP exceeded a 1:2 ratio in new license to maintenance revenue.  Why?  Customers chose not to upgrade, purchase new licenses, and expand their footprint.   Despite the downturn, most vendors survived with operating margins between 10% an 50%, well above those achieved by SaaS vendors.   Traditional vendors clearly felt pressure from SaaS/Cloud.
  • SaaS Models Prove Themselves In 2009. Meanwhile, every SaaS vendor grew, from Ariba with the lowest YoY revenue growth (0.44%) to SuccessFactors with the highest (38.73%). Overall the SaaS vendors tracked in the 2009 SII grew 7.98% in YoY revenue. SaaS deployments expanded in all areas from CRM to HCM to spend management. Of note, exceeded the $1.3B mark, a milestone for the SaaS industry.

Figure 1. Software Insider IndexTM (SII) Top 35 Enterprise Business Apps VendorsTM (Calendar Year Revenue)


Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.


Best Practices: Lessons Learned In What SMB’s Want From Their ERP Provider

Competition Intensifies For The Small And Medium Organization’s Software Budget

Software vendors such as Oracle and SAP can no longer rely on their large enterprise customers for double digit year-over-year growth.  In fact, their customers have not only reached a saturation point in being able to consume new solutions, but have also faced demands to cut their large maintenance bills.  With nowhere to go, enterprise apps vendors now turn to the small and medium sized market to drive their growth plans.  Consequently, billion to multi-billion dollar SMB stalwarts such as Infor, Microsoft, Sage, and Lawson are not standing still.  In fact, they seek opportunities to take market share from the industry leaders while fending off challenges from sub $500M SMB vendors such as Agresso, CDC Software, Deltek, Epicor, Exact, IFS, NetSuite, QAD, and Syspro.

Small And Medium-Sized Organizations Seek Enterprise Class Solutions Without The Resource Overhead

Globalization, regulatory compliance, and economic demands results in similar market pressures for all sizes of business.  Size no longer plays a relevant role in business requirements.  In fact, a recent survey of over 100 small and medium sized organizations, shows similar needs as large enterprises.  However, small and medium-sized organizations can not afford the resource overhead required to maintain large and complex software systems.  The 10 areas that drive vendor selection decisions include (see Figure 1):

Figure 1. Small and medium sized organizations seek enterprise class solutions without the resource overhead


The Bottom Line – Ten Lessons Learned Emerge From Recent Vendor Selection Trends

  • Invest in last mile industry focused solutions.Customers expect their vendor to speak their language.  Solutions that lack vertical fluency and limited industry customer referencability will be relegated to the ERP graveyard.
    Lessons learned: Demonstrate thought leadership in each vertical and lead industry discussions.  Focus on a handful of verticals.
  • Focus on rapid implementation and realization. Gone are the days of 12 to 18 month deployments.  Customers seek deployments times with less than 3 months.
    Lessons learned: Consider SaaS and OnDemand options.  Templates and productized roll-outs improve time to market but can’t compete with  SaaS solutions and onDemand offerings in demonstrating value to customers.
  • Expand the number of trusted partners and vendors. As SMB’s expand across the globe, they expect vendors to invest in trusted partners for both delivery and product footprint.  Customers expect partners to assist with localization in new geographies, extend vertical solutions, and integration.
    Lessons learned: Build partner ecosystems to geometrically expand reach while meeting customer needs.  No vendor can deliver on all customer needs.
  • Deploy easy to use reporting tools and BI. Value out of the box requires BI and reporting tools to be proactive and pervasive.  Users should have access to relevant and timely information along business processes.
    Lessons learned: Design reporting tools with the end in mind.   Start with the value of information and embed throughout the business process.
  • Reduce administrative complexity and ownership costs. SMB’s seek enterprise class capabilities sans the resource overhead of traditional large ERP products.  Business users need to be able to make changes and extend the system.  Ownership costs such as maintenance should deliver value or be reduced.
    Lessons learned: Design self-service administration capabilities from the get-go, not an afterthought.  Software maintenance needs to deliver value or be offered in tiers based on perceived value.
  • Apply Web 2.0 style usability. Solutions should not require extensive training.  New generations of work expect the simplicity and ease of use from consumer based web applications.
    Lessons learned: Invest in user experience and user interaction.  Design process flow based on role-based personas.
  • Improve stakeholder access. Employees, partners, and customers must gain access to key business information.   Value should not be locked away from users when disconnected.  Mobile remains a future growth area.
    Lessons learned: Allow information to be accessed by everyone, everywhere, and at anytime.  New stakeholders will need access so apps should be designed with bullet-proof role based security.
  • Embed Microsoft Office Integration. Ability to use productivity tools should be a given.  Customers seek the ability to seamlessly integrate.
    Lessons learned. Success requires the design Office integration to be both a user interface and gateway into applications.  Clunky interfaces into Microsoft fail in adoption.
  • Deliver worry free updates. Customers should be able to update and upgrade software without significant time spent testing integrations and taking down the system.
    Lessons learned. Design application management into the system design.  Consider the business impact of down time.
  • Provide financing options.  Customers now expect vendors to provide financing to facilitate license purchases.  In many cases, clients seek financing to preserve cash position and add additional services such as training and implementation.
    Lessons learned. Use financing as deal enabler to drive not only license growth, but also larger deal sizes.  Financing is a weapon.

Your POV

Prospects and customers – do these requirements ring true?  Vendors -where are you with your SMB strategy? Let us know how we can assist.  Please post or send on your comments to rwang0 (at) gmail (dot) com or r (at) altimetergroup (dot) com and we’ll keep your anonymity.

Copyright © 2009 R Wang. All rights reserved.

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

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…


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. $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. $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.

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

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%), (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%), (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
  • (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 =)

Vendor Event: Exact Software’s Engage 2009!

Title: Vendor Event: Exact Software’s Engage 2009!
Location: Gaylord Opryland Resort and Convention Center Nashville, TN
Link out: Click here
Description: Engage 2009!

Engage is Exact Software Americas’ annual customer conference dedicated to sharing knowledge and ideas with the users of our award-winning business applications. With Engage 2009, Exact is offering your employees the opportunity to “engage” with our product experts, business partners, companion solution providers, and other Exact Software customers. Conference attendance will help you discover more ways to maximize your current software investment, as well as help you prepare your organization for the next generation of Exact software!

Why you should Engage with Exact Software
This conference is truly all about you, and our vision is that you will come away from this event with more knowledge about the products you currently use, more ideas for using them in unique and more profitable ways, and a clearer idea of what to expect from Exact in the months and years to come.

In addition to the strategic general sessions and informative keynote addresses, Engage attendees will also benefit from targeted educational opportunities, tremendous networking opportunities, third-party product demonstrations, and customer success stories that illustrate how other companies have deployed Exact software to improve performance, productivity, and/or profitability.

The conference schedule includes sessions that apply to all areas of your company, including your management, financial, administrative, and technical teams. We encourage you to send as many attendees as possible so your business can maximize the benefits of Engage.

Attendance has many advantages, including:

Connect with Exact Software executives
Access to product training sessions and development staff
A first look at Exact Software’s next generation of solutions
Discussions with peers that address specific solution issues
New product test-drives in the Solutions Lab

See you at Engage 2009
March 22-25, 2009
Gaylord Opryland Resort and Convention Center
Nashville, TN

Start Date: 2009-03-22
End Date: 2009-03-25