Lawson Software Marches Over $300M Milestone
Written By: Predrag Jakovljevic
Published On: August 24 2000
Lawson Software Marches Over $300M Milestone
According to a press release from August 3, Lawson Software, a provider
of Internet-enabled business applications, announced it has won a major
e-business contract with HCA, owner and operator of more than 200 hospitals
and other facilities in 24 US states, England and Switzerland. HCA, the
nation's leading healthcare provider, licensed the full lawson.insight
financials, human resources and procurement solution suites, as well as
analytics, e-commerce and open component solution extensions. HCA also
licensed Lawson's Employee and Manager, Financial Information and Vendor
Information Web Self Service Centers. The contract represents the largest
single sale in Lawson's 25-year history.
won the contract following a comprehensive evaluation that included several
bidders. HCA officials cited Lawson's robust functionality, advanced workflow,
Web Deployability, full integration and ease of implementation and customization
among the technological reasons for selecting Lawson.
technological strength, including its scalability, was very impressive,"
said Terrie Tidwell, vice president, Financial Systems, HCA. "But Lawson
clearly stood out in its strong healthcare experience, reputation and
dedication. Lawson and HCA share a dedication to organizational excellence
and customer service, so our corporate cultures are a very good match
will strive to leverage its Lawson e-business solutions to consolidate
and streamline financial and payroll processes throughout the enterprise,
replacing its legacy system infrastructure. Lawson's Web self-service
solutions will empower HCA's employees with real-time access and control
of the information they need to achieve their corporate mission.
on July 20, Lawson Software announced financial results and its year-over-year
growth statistics for the year ended May 31, 2000. The company reported
revenues of $306 million for the year, yielding an overall revenue growth
rate of 15.7%. Lawson's international revenue increased 41.5%. Lawson
experienced 36.6% growth in contracting activity for target vertical markets,
including healthcare, retail, professional services, financial services,
public sector and telecommunications.
of Lawson's new vertical markets - professional services, financial services
and telecommunications - experienced triple-digit growth in contracting
activity, compared to the same markets without a vertical focus in their
prior fiscal year. Lawson continued its expansion in the retail sector
with license fee growth of 33.3%. Lawson continues to execute on activities
to generate revenue from lawson.community - e-business solutions and
e-services powered by Lawson and delivered via the Internet. Lawson reported
growth of more than 300% in new lawson.community commitments during fiscal
a fiscal year that bridged Y2K, Lawson moved into a new corporate headquarters
building, underwent an internal restructuring, and launched four new vertical
market initiatives plus a new corporate strategy of powering e-services
for e-business," said Jay Coughlan, president and chief operating officer,
Lawson Software. "At the same time, Lawson maintained solid revenue growth
while building a significant amount of deferred and subscription backlog
revenue, which is helping us operate and forecast much more like a publicly-traded
company. Through our lawson.community strategy, we've established new
sales channels and a source of steady, recurring income. That strategy
already is paying off, and we are very optimistic about our position in
the market and the future of the company."
Lawson continues to reap rewards from continually investing significant
R&D dollars in order to deliver innovative products, often in advance
of much larger competitors (and much more tacitly, without generating
much of a hype). The recent announcement like the incorporation of vertically
focused business intelligence (analytical) capabilities speaks for it.
Furthermore, Lawson has demonstrated a very tight industry focus and is
regarded as one of the Top 3 ERP systems for Healthcare, Retail, and Professional
Industries. Being privately held and independent of Wall Street pressures
has allowed the company to direct its investments for development of its
desired core competencies.
company believes that they 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 them other leads. Lawson has made an all-out
effort to establish itself as a force in e-business. To that end, it has
been building its products and services around three main pillars: Lawson.community,
Lawson.insight, and Lawson.consulting.
is a work-in-progress of its strategy to possibly satisfy all the needs
of the Internet users of its Web-based e-services. It currently comprises:
iJob, a real-time candidate registration; Workforce Analytics, a Lawson
hosted e-service designed to assist HR professionals measure and manage
their human capital; Lawson Digital Depot, an Internet procurement portal;
and Lawson Tone that delivers Lawson business applications via the Internet
by partnering with applications service providers (ASPs).
is an e-business management system, which contains Lawson's traditional
ERP software functionality. Lawson.insight products are grouped as engines,
Self-Evident Applications (SEA), or extensions. The engines 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). Lawson has long been promoting its SEA initiative,
with the idea to tremendously simplify the learning curve required by
users, featuring Web user interfaces and navigational tools. The extensions,
on the other hand, are customizable applications for areas that include
workflow, e-commerce, and analytics.
includes training, implementation, and support services. It offers ImpleMentor,
an online project management tool for the installation process. Training
is available through Lawson Software University (LSU) via either traditional
classroom or through Internet distance learning.
by adopting XML as its internal standard and providing appropriate interfaces,
claims to be able to integrate with other e-commerce systems either on
the front end or on 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.
has also built an impressive mind share in the ASP market. Lawson's main
customer base is within the healthcare, financial, and professional services
space, with many smaller firms that are generally more attracted to the
notion of turning over their applications to someone else to run, while
they focus solely on their core competencies. Moreover, Lawson's software
consists mainly of financial, procurement, and human resource transaction
systems, the ERP components that customers are generally more eager to
outsource. With close to 400 ASP sites already signed up, Lawson is ahead
of a number of much larger and, therefore, noisier ASP proponents, some
of them already usurping the title of an ASP market leader.
we believe that Lawson's product strategy against its major competitors
is on track, one should not discount fierce competition from much larger
vendors, like SAP, Oracle, PeopleSoft, and J.D. Edwards. These vendors,
while possibly inferior regarding healthcare or retail industry focus,
will try to influence customers purchase decisions by offering their more
comprehensive product portfolios (including CRM modules) or instilling
FUD (fear, uncertainty, doubt) in more conservative CFOs who may cast
a wary eye on Lawson's immunity from financial statement disclosure due
to its (surprising) determination to remain a privately held company.
a CRM module would be an attempt to capitalize on Lawson's recent difficulties
with a CRM strategy. Lawson's CRM strategy, which had initially floundered,
became solid only recently with a global distribution agreement in which
Lawson will integrate and sell its enterprise applications with Siebel
Systems' CRM suite.
for the FUD facts, is the recent appointment of Robert Barbieri (who has
22 years of financial management experience with publicly-traded and multinational
companies) as CFO the sign of any strategic shift in that regard?
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-end that is Lawson's strength (except 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 if they are successful, the easy integration promised by Lawson
is a compelling reason to consider them as part of any e-commerce initiative.
considering ERP applications (both web based and network dependent) should
however consider all available options, although Lawson's activities are
promising. The notion of a full Internet based solution could save time
and money on the integration. An additional consideration might be the
complete outsourcing of the ERP application with an Application Service
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 a very deep understanding of customers' needs within
the following industries: Financial Services; Healthcare; Professional
Services; Public Sector; Retail; and Telecommunications.
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 how Lawson
would deal with the issues of customizations and 3rd-party products bundling
in an ASP setup.
for the new added CRM functionality through the partnership with Siebel,
users are advised to ask for firm assurances on the availability and future
upgrades timeframes, and more detailed scope of combined product functionality.
Also, make sure that Lawson offers a single contract and help desk for
all disparate components of its product offerings. Finally, 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.