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."
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.
As a summary
of our recommendations in TEC's note on Intentia (See TEC Technology Research
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.