Intentia Americas Gains Momentum with 10 New Deals Inked During Last Two Weeks

Event Summary

On October 29, Intentia Americas announced that the company acquired 10 new customers for its Movex Enterprise Application suite during the last two weeks of October. This new business will provide substantial licensing and services revenue to start Americas' fourth quarter. According to CEO Ed Koepfler, this momentum in the Americas is expected to accelerate through the fourth quarter and continue into 2000, and is a direct result of Intentia's aggressive investments in establishing itself in the Americas during the last 15 months.

"What we have accomplished is similar to building a championship sports franchise," says Koepfler. "First, if you want to be competitive, you have to be willing to invest in the fundamentals. In Intentia's case, that includes a world-class product offering and an excellently trained professional organization to sell and implement the product. Once this foundation has been built, you can focus on winning and serving customers. The momentum we are now experiencing comes as a natural outgrowth of these strategies."

Market Impact

Intentia's challenge has long been its low brand awareness outside of the European market, particularly in North America, which contributes only 8% of Intentia's license revenues, as outlined in TEC's Intentia note in October (See TEC Technology Research Note: "Intentia: Java Evolution From AS/400" October 1st, 1999). While the market for enterprise applications was declining, the Company substantially invested in building its Americas sales and consulting organizations, both through selective acquisition and organic growth. Today, there are 403 employees in the consolidated organization, up from 187 in mid-1998. Since 1995, Intentia has won 113 American customers and successfully implemented its product in 81 of these companies. The recent spate of new deals is just "what the doctor ordered" against the backdrop of the Company's poor financial performance for the first three quarters of 1999 (See Chart). Intentia reported losses for the three consecutive quarters due to combined effects of dramatically decreased license revenues and heavy investments both in R&D (resulting in the launch of its Java-based product and Supply Chain Planning module) and its American and Japanese operations.

User Recommendations

As a summary of our recommendations in TEC's note on Intentia (See TEC Technology Research Note: "Intentia: Java Evolution From AS/400" October 1st, 1999), Intentia should be included on a long list of an enterprise application selection to mid-market and low end Tier 1 companies (with $50M-$1B in revenue) within the following industries: Automotive; Aviation; Furniture; Fashion; Food and Beverage; Paper; Pharmaceuticals; Steel; Wholesale and Retail.

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