Agresso, Lawson, and Salesforce.com in the News

Unit 4 Agresso N.V. and Salesforce.com inc. announced their annual financial results. In other news, Agresso stated it was acquiring Coda plc while Lawson Software Inc. said it had agreed to purchase VasTech Inc.

Focal Points:

• Salesforce.com (SFDC) stated its total fourth quarter revenues were $216.9 million, an increase of 50 percent year over year. Subscription and support revenues were $196.5 million, a 49 percent increase from the previous year's quarter, while professional services and other revenues were $20.4 million. On a generally accepted accounting principal basis (GAAP) fourth quarter earnings were $7.4 million, up from $0.5 million in the fourth quarter of the previous year. For the full fiscal year 2008, the company reported revenues of $748.7 million, a growth of 51 percent from the prior year. Subscription and support revenues were $680.6 million for the year, an increase of 51%, while professional services revenue rose 50% to finish at $68.1 million. On a GAAP basis net earnings for the year were $18.4 million in contrast to $0.4 million the previous year. The company added 2,900 net paying customers during the quarter and 11,200 during the year, giving the firm approximately 41,000 customers. SFDC also states its subscriber base is nearly 1.1 million, an increase of more than 450,000 year over year.
• Unit 4 Agresso, a provider of agile ERP solutions, reported revenues of €320.5 million for fiscal 2007, a 39 percent growth worldwide, and a net profit of €25.0 million. Officials also stated North American sales of the Agresso Business World enterprise solutions suite grew 62 percent in 2007. Agresso specifically targets a dynamic segment of the services sector that it calls BLINC -- Businesses Living IN Change. Additionally, the company released word that it has agreed to purchase Coda, a provider of financial management software, for approximately $315 million. Coda was founded in the UK in 1979, has around 600 employees working in 14 countries. The company recently announced Coda 2go global accounting system, which is built on Salesforce.com's Force.com platform.
• Lawson announced it had an agreement to acquire VasTech, a provider of workforce management software and services. The company, headquartered in Annapolis, MD, employs 45 people. Lawson states that with this purchase it will be able to offer customers in the healthcare, hospitality and gaming industries an advanced workforce management staffing and scheduling solution to complement its Lawson Human Capital Management offerings.

Experton Group believes Software as a Service (SaaS) and managed services will achieve greater growth in 2008 as companies look for ways to improve processes, contain costs, remain flexible, and satisfy customer demands. Agresso and Salesforce.com are achieving strong growth patterns due to their value propositions, particularly the desire of executives to move to flexible CRM and ERP platforms that can be quickly implemented and revised without the significant upfront development and hardware costs that traditional platforms require. The Lawson acquisition will make it a stronger player in the targeted markets but the company still needs to strengthen its offerings and margins to remain competitive. IT executives considering SaaS and/or managed services solutions should understand the business and regulatory risks involved in having CRM and ERP solutions running off site and the options available to mitigate risks to acceptable levels.