American Software Has Been Starving While Delivering Innovations
Written By: Predrag Jakovljevic
Published On: September 2000
American Software Has Been Starving While Delivering Innovations
In August, American Software, Inc, one of the leading mid-market enterprise
applications vendors, reported results for the first quarter of fiscal
year 2001, ended July 31, 2000. Total revenues for the quarter were $22.0
million, a 22% decrease from the same quarter last year. Software license
fees were $2.5 million, a 60% decrease from the same period last year.
Services revenues were $13.3 million, a 16% decrease from the same quarter
last year. Maintenance revenues were $6.3 million, a 1% increase from
the same period in fiscal 2000. Net loss was approximately $3.7 million
compared to a net income of $904,000 for the comparable period last year
(See Figure 1).
Software recognizes that its post Y2K sales recovery has been slowed by
limited distribution channels," said James C. Edenfield, President and
CEO of American Software. "We are aggressively executing a strategy that
focuses on expanding global distribution channels for our comprehensive
suite of solutions and services and we are confident that this will improve
our performance. As a result of this initiative, we are pleased to announce
our recent agreement with Labat Technologies, LTD to distribute our products
the first quarter, the Company announced that e-intelliprise, its fully
web-based ERP solution with complete front-to-back office integration,
has been expanded to include wireless markup language (WML) capability
and a business intelligence portal. The addition of wireless access will
allow users to conduct business transactions via any device that supports
WML wireless technology. This allows users to be instantaneously notified
of events and take immediate action.
Business Intelligence Portal provides secured role-based views of key
performance indicators (KPIs) that can be customized to support any user
in the supply chain. The Business Intelligence Portal is the second element
of American Software's Enterprise Portal Strategy, following the recently
released Intelligent Trading Portal. During the same period of time four
companies selected AmQUEST, the Company's wholly owned Managed Hosting
Provider (MHP) unit, to host and monitor mission-critical IT operations.
American Software, the Atlanta-based enterprise software applications
vendor, is yet another Tier 2 vendor that has been affected by the Y2K-caused
pinch. Like its brethren, the company is now in for a draught while it
continues to deliver new products and grab a piece of land for itself.
Its situation has been additionally exacerbated by its late arrival to
the ERP party and consequently, low market visibility and number of global
American Software seems to have grasped the requirements of its potential
customers that need both order capturing and ERP backbone order fulfillment
functionality within a single source. To that end, in December 1999, the
company announced its e-Intelliprise e-Business solution, with full integration
between front and back-office systems. This Web-enabled global ERP product
suite also features alert-enabled business intelligence and integrated
corporate and trading portals. e-Intelliprise is a Web-enabled reincarnation
of Intelliprise, which the company launched in 1998 as a brand new enterprise
resources planning (ERP) suite that can support multiple modes of manufacturing,
in addition to having full supply chain functionality and Internet connectivity.
The product has been written from scratch and exhibits an advanced architecture,
which is crucial for deployment of e-business products.
witnessed in the latest announcements, American Software continues to
enhance its suite of e-Business solutions with the latest attractive features
like Wireless Markup Language (WML) support for not only outbound messaging
via e-mail, cell phone, voice mail, or personal digital assistant (PDA),
but also for inbound queries via the same devices. Its Flow Manufacturing
suite that can either be integrated into e-Intelliprise or used as a stand-alone
package is still a landmark product and is currently leading the market
with its functionality (although the competition from Oracle and PeopleSoft
has been catching up).
believe American Software will continue to enhance its portal strategy
and e-Intelliprise's ability to facilitate collaboration between trading
partners. We also believe that the company should swiftly pursue alliances
with vendors that can provide more intricate sales force automation (SFA)
and customer relationship management (CRM) applications to the suite.
The company should also pursue alliances with vendors that would benefit
from embedding some of American Software's superior products like flow
manufacturing (the agreement with Geac being a good example). However,
the company still faces the challenges presented by a dismal mind share
and market visibility as well as continued sharp revenue decline and poor
financial performance (See Figure 1). Only time will tell whether the
innovative products will result in sufficient traction.
American Software's traditional target market - multi-national manufacturing
and distribution companies with annual revenues between $100 million and
$800 million may benefit from evaluating the company's value proposition.
The e-intelliprise suite has a broad scope of functionality that may satisfy
the needs of most discrete mid-market manufacturers. Given the fact that
e-intelliprise is a new product, written entirely from scratch and with
only a few dozen clients so far, a rigorous reference checking is recommended.
Organizations seeking a Web-based solution and out-of-box functionality
with little or no re-engineering effort may benefit from evaluating American
Software's ASP offering. Support, connectivity, ease of use, security,
acceptance, and scalability are only a few regular considerations.
and potential users may want to inquire about the company's plans regarding
Internet marketplaces in their respective industries. Which specific market
places does (or will) American Software connect with, what methodology
does (or will) the company prescribe to are some of the necessary inquiries
in that regard. Furthermore, companies outside of above-mentioned industries
may benefit from evaluating the company's non-core ERP product components
on a stand-alone basis for their e-business needs and leverage that information
against other vendors in the selection.
organization evaluating American Software should consider existing functionality
only, and, in the case of final selection, should inquire and negotiate
incorporation of new applications' components now at negotiated license
fees, given its recent increase in new product introductions. Future clients
are also advised to request the company's written commitment to promised
functionality, general availability date, price, length of implementation,
and seamless future upgrades, particularly for recently announced partnered
offerings. Moderate caution should be exercised now and a watchful eye
should be kept on the company's future financial performance.