Event
Summary
According to Intentia's press release, on May 23, Sun Microsystems, Inc.
and Intentia International AB announced a strategic alliance. Intentia
will offer its e-collaboration Application, Movex NextGen and implementation
services on the Solaris Operating Environment. Sun will support Movex
NextGen in go-to-market activities, implementation and support processes.
"Intentia's
offering goes beyond software technology to a true business solution that
will allow us to broaden both our geographic and vertical industry reach.
It also substantiates the quality, depth and breadth of our supply chain
functionalities," said Robert Youngjohns, vice president, Sun Microsystems,
Europe, Middle East and Africa. "The Movex NextGen architecture fits
our network computing strategy. Together, we're providing mid-range and
growing companies with a world-class e-business solution."
"Together,
Intentia and Sun can provide all the necessary technology, functionality,
implementation assistance and support services that customers require
to take full advantage of Internet technologies in running their e-collaboration
solutions," said Bjrn Algkvist CEO Intentia International. "The Intentia
and Sun combination can lower the cost of ownership and equips companies
to easily extend their business processes."
Sun
and Intentia also claim they will provide customers with a compelling
and well-integrated service offering. Working with Intentia's business
consultants, Sun will provide professional services to maximize the performance
of NextGen running on Sun systems and engage with Intentia's implementation
methodology, Implex.
Earlier,
on April 27, Intentia reported results of its first quarter in 2000. "The
demand for enterprise applications systems is slowly turning into rapid
growth. Today, the market understands that standardized enterprise applications
are key to successful e-business solutions and maintaining a competitive
edge in the new economy," stated Bjrn Algkvist, President and CEO of
Intentia International AB. "We have been very successful in selling and
implementing our e-business solutions and we continuously expand our product
offering. Right now, Intentia receives approximately two new contracts
every week. The market for business-to-business related projects is growing
especially rapidly. Intentia is in a very good position to assume a substantial
portion of this market. Today, we can offer current and prospective customers
in the forty markets we serve our entire selection of e-business applications,
solutions and consultancy services."
The
results have nevertheless been mixed on paper (See Figure 1). In regard
to license revenue, Intentia International reported a notable increase
of 33%. At the same time, total revenue increased by 19%. However, a hefty
net loss of approximately $9.3 million has also been posted.
Figure
1.
Market
Impact
Intentia has been trying to put behind the harrowing 1999 that resulted
in declining license revenue, a hefty loss and significant organizational
restructuring, particularly within the U.S. market. The latest results
show only a dismal improvement. The company has posted its fifth consecutive
loss, and its shareholders may not any longer buy the "growth at all costs"
mantra. On a positive side, Intentia claims to have rounded out its platform-independent
extended ERP product portfolio, which also features strong industry-specific
functionality and expertise.
Intentia
has long been confined to offering only an IBM AS/400-based product. While
we believe that its choice of delivering uniform platform-independent
products is more practical than, e.g., MAPICS' option of offering dual
product lines after acquiring an NT-based product, Intentia's great challenge
remains its low market awareness. This is attributable to a great degree
to the company's bland marketing effort thus far. The current changes
may be the first sign of management's departure from the touchy-feely
tacit corporate culture and modest marketing approach to playing hardball
and achieving more noise in the market.
The alliance with Sun may create an opportunity for expansion for both
companies. Sun's UNIX leadership position increases Intentia's opportunities
to sell its product on Sun's technology, whereas Intentia's move to a
Java technology-based offering provides new opportunities for Sun, especially
in the mid-range server market. The market should expect a similar alliance
in the future, possibly with another major hardware vendor, which would
promote Intentia's product on the Windows NT platform too.
User
Recommendations
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. Potential clients in North America, however, should conduct thorough
research on industry expertise and reference sites of a regional Intentia
office or an affiliate service provider when Intentia is included in the
selection process.
We
also encourage existing and potential users to familiarize themselves
with the company's ambitious new products offerings and their availability
(e.g., Java-based platform independent Movex NextGen release, e-Commerce
modules, CRM modules, business intelligence modules, ASP offering, etc.),
at least to better leverage their negotiating position with other vendors
involved in a particular selection exercise.
Future
clients are also advised to request the Company's written commitment to
promised functionality, general availability date, price, length of implementation,
and seamless future upgrades, particularly for recently announced offerings.
Intentia has traditionally been honest and forthright in addressing these
questions.