Aspen Technology Built Success From The Ground Up

  • Written By: Steve McVey
  • Published: September 7 2000

Aspen Technology Built Success From The Ground Up
S. McVey - September 7, 2000

Event Summary

Aspen Technology recently reported financial results for its fourth quarter and fiscal year ended June 30, 2000. The vendor logged a dramatic 88% increase in license revenue in the fourth quarter, a strong indication that its solutions for manufacturing enterprise optimization and extended supply chain management are gaining ground among users in the process industries. Total revenues for the fourth quarter grew 44 percent to $83.4 million from $57.8 million in the same period ending June 30, 1999. Excluding one-time acquisition costs, the company reported net income for the quarter of $5.7 million, or $0.18 per diluted share, compared with a net loss of $3.4 million, or $0.12 per diluted share for the same period last year, excluding restructuring and other charges. AspenTech restated its fiscal 1999 and 2000 results to reflect the acquisition of Petrolsoft Corporation, which was completed during the fourth quarter and treated as a pooling-of-interests.

Figure 1.

"We are pleased to have exceeded our goals for both growth and profitability in the fourth quarter and fiscal year," said Larry Evans, Chairman & CEO of AspenTech. "The rapid growth in our license revenues continued to be driven by strong demand for our integrated Enterprise Optimization and supply chain solutions, as process manufacturers increasingly invest in technology to improve their manufacturing productivity and optimize their supply chains. We are unique in the industry as the only company with a proven integrated solution, and our domain expertise and process knowledge enable us to deploy mission-critical solutions that other vendors cannot provide."

Market Impact

AspenTech's success comes in part due to its unique vision for automating the enterprise. Where ERP vendors are busy linking manufacturing-centric applications to higher corporate functions like financials and human resources, Aspen has worked in the other direction, integrating supply chain optimization for process manufacturing to "lower" functions such as process control and operations. Aspen is alone among large vendors in its ability to do this, as none of the others have Aspen's process manufacturing knowledge base and expertise. Aspen was founded by chemical engineers, hires engineers as developers and business consultants, and produces applications that appeal to engineers.

User Recommendations

Clearly, Aspen Technology should occupy a prominent role in enterprise software selections for process manufacturers, especially those who produce chemicals, pharmaceuticals, and refined oil products. For supply chain management, Aspen is the only vendor that can offer deep functionality for the process industries with the added capability to deliver process simulation and control functionality and integrate them. The main caveat is that most of Aspen's SCM applications are essentially toolkits in which desired features can be developed, not packaged solutions that can merely be configured. Thus, experienced resources are a must for implementations.

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