Plummeting revenues at some of the key supply chain management and manufacturing software vendors indicate that the trend towards signing major deals for multi-function supply chain suites is long gone. Technology buyers now focus on very specific problems in their supply chains and how technology can be applied to them, says AMR Research.
Reflecting this shift in buying patterns, revenues were down 16% at Swedish business applications suite vendor IFS in its third financial quarter. Despite signing a total of 65 contracts during the quarter, licence revenue also plummeted by 16%. However, CEO Bengt Nilsson argues that IFS still outperformed the business applications market as a whole, where collective licence revenue fell 22% over the same period.
One of IFS’s rivals, fellow Swedish business applications vendor Intentia, released its third quarter results early after it alleged that a ‘hacker’ using the network of the Reuters news service had broken into its computer systems and published the results ahead of schedule. It fared little better than IFS, recording a drop in revenue of 14% and a decline in licence revenue of 9%. Intentia has also been hampered by rising consulting costs – as customers migrate to the Java-based version of its Movex applications suite – and falling consulting revenues, down 3% for the quarter.
US-based manufacturing and supply chain software supplier Aspen Technology was one of the few companies to buck this downward trend in its first quarter of 2003. Licence revenue shot up 54%, boosting total revenue growth for the quarter, which reached 17% compared with the corresponding quarter in 2002. Aspen is still struggling to stem its losses, however. The company plans to reduce spending in its current quarter by 10% from first quarter levels in a drive towards profitability.