An Analyst's Day

5:30am, the family sleeps and it’s time to prepare – today is Analyst Day in Frankfurt. I’m on the road 2h45min before the event starts (1h20min should be sufficient) but sometimes the traffic is terrible. Last week I missed a flight because the highway was completely closed after an accident and I had to give up after 3h driving for nothing. When the concern of missing an appointment slowly turns into certainty, these are the moments that cost me some of my (remaining) hair.

(Of course) I arrive much too early, but other analysts are already there (probably they don’t sleep at all). Plenty of time to look through my presentation again for some final adjustments and for some small talk with customers that arrived early.

1min before the kick-off, I make the last slide changes and load it to the presentation laptop. Another analyst colleague goes first. I have seen some of the slides a hundred times and look around at the faces of the attendees. For most, it’s the first time they see e.g. our market sizing and forecasting data, and they make hectic notes into their notebooks. They don’t know yet that we will distribute all slides after the event. I’m getting a bit nervous, but I’m used to it. When I'm not nervous any more before a presentation, it’ll get boring for me and the audience, and I should probably do something else.

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Software License Revenues Roar Back In Q1 2010 -- And Why Licensed Software Will Co-Exist With SaaS Beyond 2010

TECH DEVELOPMENTS:  With SAP's release of its Q1 2010 earnings, it is clear that those who saw an irresistible shift from licensed software to software-as-a-service (SaaS) are a bit premature in their obituaries for the licensed software model.  SAP's license revenues increased by 11% in euros, and by 18% when its euro revenues are converted into dollars at the average exchange rates in Q1 2010 and Q1 2009.  Oracle's license revenues for its fiscal quarter ending February 2010 rose by 13% in US dollars (and 7% in euros).  Among other vendors, Lawson reported a 28% increase in its license revenues (in dollars), and Epicor reported 23%. 

These growth rates partly reflect how badly licensed software (which is treated as capital investment) got hit in the general cutbacks in business corporate investment in 2009, as panicked companies scrambled to conserve cash and avoid having to borrow from shut-down financial markets.  However, I think there's more to the recovery than rebound from depressed levels a year ago.

Forrester's surveys of companies about why they don't like software-as-a-service consistently turn up five reasons: 1) inability to customize; 2) difficulty in integration to other systems; 3) security of data and information; 4) worries about pricing models that put clients on a constantly rising escalator; and 5) lack of SaaS products.  SaaS vendors are addressing all of these, and there is no question that these barriers are eroding.  But they still persist, and mean that the license software model has a high degree of persistence in software categories like core ERP systems (integration and security of core data), industry-focused applications (need for customization), eProcurement products (integration to ERP systems), and contract life cycle management products (security of contract data).  

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GSI Gains Control Of Intershop: What It Means

On April 14th, GSI and Intershop announced that they had entered into a licensing and distribution agreement. As a part of the agreement, GSI gains a minority and controlling interest in Intershop. With a relatively small ownership stake of 10.5%, GSI will have significant influence over Intershop, due to Intershop’s very diluted and diverse stockholder base. This gives GSI control over one of the oldest and most established eCommerce software solutions in Western and Central Europe. Additionally, under the agreement GSI will have exclusive rights to distribute Intershop’s solutions in the Americas and also have access to Intershop’s software, engineering talent, and integration experience.


What the agreement means:

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