Navision Enhances Its e-Vision And Looks To Expand Vertically

Navision Enhances Its e-Vision And Looks To Expand Vertically
P.J. Jakovljevic - November 28, 2001

Event Summary 

On November 1, Navision (CSE: NAVI), a Danish provider of enterprise business solutions for mid-sized companies, extended its business-to-business (B2B) solution, Commerce Gateway, to the Navision Axapta product line, giving Navision Axapta customers the opportunity to save time, lower costs and orchestrate business processes more effectively. With Commerce Gateway, Navision Axapta customers should supposedly be able to work more proactively with customers, partners and vendors. They join the Navision Attain and Navision Financials customers who were introduced to Commerce Gateway earlier this year.

Recent Navision developments include:

  • Navision Axapta Line Extended

  • Navision Financials Expanded

  • Navision/Damgaard Merger Financial Results

  • Other Developments

This is Part One of a three-part note on Navision. Part Two will discuss the Market Impact and Part Three will contain User Recommendations.

Navision Axapta Line Extended 

Commerce Gateway is an integrated solution, which opens up Navision Axapta to the electronic exchange of trading documents, including sales and purchase orders, with other enterprise systems. Navision touts that by using Commerce Gateway, Navision Axapta customers have the flexibility to meet the demands of partners regardless of the industry they are in, the program they use, or the standards they require. It uses Microsoft BizTalk technology, which is based on the industry standard extensible markup language (XML). This means that vital business information, such as stock availability, should supposedly be exchanged in a quick, easy and reliable manner via the automated processing of XML schemas. Commerce Gateway is reportedly the first global solution based on Microsoft BizTalk Server 2000.

Commerce Gateway is among several improvements announced for Navision Axapta. New to the customer relationship management (CRM) offering is a range of capabilities including a new marketing automation module, which helps marketing and sales personnel share useful product and customer information. Navision Axapta Product Builder is another new module, which enables companies to configure product offerings online with greater precision. Product Builder also gives a company's customers and vendors the ability to configure their own products, submit orders and view an expected date of delivery via the Product Builder Web application.

Navision Axapta is touted as a scalable business management solution for growing, medium-sized companies. The above new functionality lays the groundwork for the next major Navision Axapta release scheduled for 2002. Earlier, on October 8, Navision announced the result of a benchmark that an international test center has carried out on Navision Axapta 2.5. The benchmark reportedly shows that Navision Axapta is capable of handling transactions for both small and large enterprises on the mid-market. The benchmark showed 3,600 simultaneous standard users of Navision Axapta with an average response time of 0.08 seconds. Simultaneously, a record high number of sales order transactions were carried out. In one hour more than 315,000 sales order lines were completed. The company cites that while it and its partners still focus on mid-sized enterprises, the results of this test show strong scalability and performance and that enterprises can grow together with Navision. The test was carried out in collaboration with Compaq and Oracle, with all hardware and software having been considered standard and already available on the market.

Navision Financials Expanded 

Further, on October 23, Navision announced the release of Navision Connector for Navision Financials and Siebel eBusiness 2000, MidMarket Edition for localization in local Navision offices around the world. The Navision Connector for Siebel eBusiness reportedly links all the sales, marketing and customer data in Siebel eBusiness 2000, MidMarket Edition with the critical business information in Navision Financials.

The Navision Siebel solution should give medium-sized companies the information they need to identify, attract and retain profitable customers. The Navision Siebel solution also supposedly gives companies the overview they need to identify their most profitable customers and quickly categorize their key accounts. The Navision Siebel solution will be distributed through 35 certified Navision Siebel partners.

Navision/ Damgaard Merger Financial Results 

On August 20, the board of Directors of Navision a/s adopted the financial statements for fiscal year 2000/2001 ending June 30, 2001. The most significant event in fiscal year was the merger of Navision Software and Damgaard in December 2000 Damgaard (see Does NavisionDamgaard Merger Mark Further Mid-Market Consolidation?). The merger has reportedly progressed faster than planned. In March, the company name was changed from NavisionDamgaard to Navision in an effort to build a new global brand (see NavisionDamgaard Reverts To Navision, But In Name Only).

For many recent years, the company achieved a rapid growth. In fiscal 2000/2001, this growth was, however, modest. Net revenues grew by ~19% to DKK 1,496 million (~$ 179 million). Operating income before amortization of goodwill (EBITA) amounted to DKK 229 million (~$28.6 million), corresponding to 15.3% of revenues. Navision has seen growth in all markets except in its domestic Danish market, where revenues were 6% lower compared to a year ago. Despite fierce competition and difficult market conditions, the company sustained 15% growth in the US market after adjusting the exchange rate factor.

The revenues from Navision Attain showed a strong increase of 32%, while revenues from Navision Axapta (formerly Damgaard Axapta) product showed a whopping 98% increase, making the combined revenue of these products 40%. However, the other former Damgaard product lines, Navision C4/C5 (marketed solely in Denmark) and Navision XAL continued to decline 28% and 16% respectively. Encouraging, however, is that license revenue for Q4 2001 reached DKK 358 million (~$42.8 million), which is a 61% growth compared to DKK 223 million (~$29.7 million) a year ago. Net income was DKK 158 million, compared to DKK 65 million in fiscal 1999/2000.

Other Developments 

New product releases included a new version of Navision Axapta, a comprehensive new version of Navision Attain (that aggregates earlier Navision Financials, Navision Manufacturing and Navision Distribution), and several e-business solutions, including the above Commerce Gateway and User Portal and Commerce Portal. New local Navision companies opened in Russia and India bringing the total number to 26, and Navision signed a distribution agreement for Latin America.

Navision's solutions are sold exclusively through a worldwide network of close to 2,200 partners. The company currently has close to 128,000 installations worldwide, and derives 76% of its revenue from the international market outside of Denmark. Despite challenging market conditions, Navision expects to achieve a growth of approximately 18% in net revenues for the fiscal year 2001/2002 compared to 2000/2001. The EBITA margin is expected to be in the region of 17% compared to the 15% achieved in fiscal year 2000/2001.

This concludes Part One of a three-part note on Navision. Part Two will discuss the Market Impact and Part Three will contain User Recommendations.

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