Epicor 3Q, SAP at a Crossroads

As we mentioned in this week’s newsletter (you can subscribe here), Epicor had a busy week. Non-GAAP revenue for the period ending September 30 was $137.8M, up 33% from 3Q07. This was despite a drop in license revenue from the year earlier period as deals slid into future quarters due to the slowing economy. Most of the revenue came from maintenance (a record $52M), consulting ($41.8M), and hardware/other ($21.6M). The latter was driven by POS purchases in the retail sector.

 

Three other numbers stand out in the quarter. The company added 155 new customers, won back 142 more customers who had opted to go off maintenance, and ended September with a 94% customer retention rate.

 

On a different note, a few weeks ago SAP made a minority investment in Crossgate AG, a top provider of hosted B2B integration services. The company has more than 40,000 customers running on the Crossgate Business-Ready Network. This week, I asked Crossgate president Scott Lewin about his new alliance partner. Here’s his response:

 

“In the past 2 weeks, most major IBUs (industry business units) within SAP have requested briefings and are working on joint messaging. Within the SAP customer base, the amount of inbound interest has increased dramatically. I think we are in for quite a ride.”

 

You can read more about our conversations with Epicor, including its rejection of Elliot Associates takeover bid and its embrace of Microsoft's ambitious cloud computing initiative, Azure. We also have insights from our meeting with QAD and our take on SAP's new bite-size, “Best-Run NOW”, applications that take direct aim at Oracle in this week's newsletter.

 

We're off to San Francisco for salesforce.com's Dreamforce conference. We'll have updates as we get them. Until then, what do you think of any of Epicor's, QAD's, or SAP's plans.

Comments

[Jean-Claude Bellando]

Hi Bruce,
I don't think Crossgate has 40,000 customers using their services. It is actually around 3,000.
I think 40,000 represents the whole number of b2b partners connected. I think you may find that 1 b2b partner may be connected to more than 1 customer. That explains the difference.
My 2 cents,

[aion kinah]

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