Lawson Software Expands Vertically As Well
Written By: Predrag Jakovljevic
Published On: November 2000
Lawson Software Expands Vertically As Well
On October 12, Lawson Software, a provider of Internet-enabled business
applications, announced the formation of its sixth vertical market initiative.
This one is for the telecommunications industry, and joins Lawson's established
vertical markets in healthcare, retail, professional services, public
sector and financial services.
plans to bring to the telecommunications market the full suite of its
lawson.insight Web-enabled extended-ERP Applications, including Human
Resources, Financials, Procurement, Distribution, Analytics and Enterprise
Relationship Management. As part of the new market initiative, Lawson
has extended its alliance with partner EYT, formerly Ernst & Young Technologies.
EYT will provide knowledge transfer and design services, enabling Lawson
to extend its core product line to incorporate new functionality required
by the telecommunications industry. Additionally, the partners will jointly
develop interfaces to industry-standard billing and service/activation
management systems using industry-standard middleware engines.
capability being designed into the product will be embodied in the analytic
extensions, where telecommunications-related key performance indicators
integrate data from lawson.insight with data from other billing and provisioning
systems to present a real-time view of strategic operational metrics.
The relationship with EYT offers additional value, since the company also
is a LawsonTone ASP partner with extensive telecommunications expertise.
is not a new industry for Lawson," said Bob North, vice president of Lawson's
telecommunications field operations. "We've had rapid growth in this market
segment over the last three years. However, the strategic partnership
with EYT extends the value of our products well beyond traditional back-office
e-business solutions and will allow us to offer an end-to-end solution
to the telco market."
October 9, Lawson Software announced "the best quarter of contracting
activity in the company's 25-year history". Lawson reported total revenues
of $84.2 million in the first quarter of fiscal year 2001, ended August
31, 2000. The company reported license fee revenue growth of 36% over
the same quarter last year in its key target markets of healthcare, retail,
professional services, financial services, public sector and telecommunications.
Lawson's total contracting activity rose 78% over fiscal year 2000 first
quarter figures. Contracting activity from the emerging lawson.community
strategy - a slew of e-business solutions powered by Lawson and delivered
via the Internet - rose 173% over the same quarter last year.
is an incredible time for Lawson Software," said Bob Barbieri, CFO, Lawson
Software. "These figures prove that our strategies are working, our employees
are meeting the challenges of our industry and customers are finding the
solutions to their business challenges through Lawson applications. And
as positive as the recognized revenue numbers are, our contracting activity
gives us cause for even more optimism."
While we abstain from using bombastic words like "incredible times" to
depict Lawson's current situation, we definitely believe that the company
is in a very good shape. Lawson continues to reap rewards and to establish
itself as a leader in the mid-market for financial accounting and HR applications
by continually betting on the following three pillars of wisdom for the
new Internet economy:
delivery of innovative, Web-enabled and componentized products, often
in advance of much larger and more visible publicly traded competitors
tight industry focus in the above-mentioned selected markets
involvement in ASP deployment
announcement of a vertically focused partnership with EYT further speaks
to Lawson's achievements. The company believes that it can support companies
ranging in size from only a few million to $1 billion or more. It will
be concentrating its internal sales efforts on its traditional vertical
markets for now and relying on partners to bring other leads. The recent
partnership with EYT as well as one with Siebel Systems earlier in the
year might be the sign that the company has started to address its partnerships
more strategically rather than opportunistically, which has been the case
in the past. Also, this partnership could provide for a readily available
toolkit for making deeper functional adjustments and customizations, which
the company has not traditionally had available.
made an all-out effort to establish itself as a force in e-business. To
that end, it was one of the first vendors to deliver Web-enabled Self-Evident
Applications (SEA) in 1996. It latest application suite, lawson.insight
8, delivered earlier in the year, is an e-business management system which
also contains Lawson's traditional ERP software functionality. Lawson.insight
products are grouped and named as engines, Self-Evident Applications (SEA),
comprise core ERP modules such as financials, human resources, procurement
and distribution management, and some extended ERP functions such as
CRM (through an OEM agreement with Siebel).
refers to Lawson's long-standing initiative to tremendously simplify
the learning curve required by users; it features intuitive Web user
interfaces and navigational tools.
are customizable applications for areas that include workflow, e-commerce,
also built an impressive mind share in the ASP market, which is becoming
increasingly attractive to its target market. Lawson's product offering
consists mainly of financial, procurement, and human resource transaction
systems, the ERP components that customers are generally eager to outsource.
With more than 40 ASP partners and close to 400 ASP sites already signed
up, Lawson is ahead of a number of much larger and, therefore, noisier
should see Lawson expand into at least another vertical market (e.g.,
utilities) within the next 18 months (60% probability). Further, the recent
appointment of Robert Barbieri as CFO and the introduction of quarterly
reporting practice might be signs that the company is preparing the ground
for going public in the foreseeable future.
Lawson's offerings seem well suited to companies planning to engage in
e-business - or already involved in it - who do not yet have the kind
of basic ERP back-office functionality that is Lawson's strength; one
exception lays in that Lawson does not provide a native support for manufacturing.
Since any company planning to engage in e-commerce will want to have at
least a basic financials package and will need other components of an
ERP suite afterwards, the easy deployability and integration promised
by Lawson is a compelling reason to consider it as part of any e-commerce
generally recommend including Lawson in a long list of an enterprise application
selection to mid-market and low end tier 1 companies (with $10M-$2B in
revenue), based on its very deep understanding of customers' needs within
the following industries: Financial Services; Healthcare; Professional
Services; Public Sector; Retail; and Telecommunications. Organizations
considering ERP applications (both web based and network dependent) should
however consider all available options.
a full Internet based solution could save time and money on the integration.
Enterprises seeking a Web-based solution and out-of-box functionality
with little or no re-engineering effort may benefit from evaluating Lawson's
ASP offering. Support, connectivity, ease of use, security, acceptance,
and scalability are only a few regular considerations. Companies with
a substantial manufacturing activity (for which Lawson does not offer
a native solution) and companies with more intricate business processes
may want to inquire about how Lawson would deal with the issues of customizations
and 3rd-party product bundling in an ASP setup.
by adopting XML as its internal standard and providing appropriate interfaces,
claims to be able to integrate with other e-commerce systems, on either
the front end or the back end, so that its customers' systems can communicate
smoothly with other vendors, whether via the Web, e-mail, or even Fax,
EDI, and spreadsheets. This, bundled with the fact that its product will
run on almost any platform or database, prompts us to believe that its
competitors, particularly mid-market ERP vendors, will be enormously pressured
to replicate Lawson's value proposition. However, consideration should
be given to the endorsement of "web standards." Should a different XML
standard be adopted (industry wide) after installation, identify who will
be responsible for accommodating the change and what measures have been
engineered into the application to support evolving standards.
should also bear in mind that improved technological integration is seldom
guaranteed by joint marketing arrangements, and only comes after the arrangement
yields considerable implementation experience. Plan for this general rule
to hold for the partnership in question.