Manugistics CEO Highlights License Sales In 4Q Report

Manugistics

"The health of a software company is always going to be driven off software license sales," not services, Owens said in an interview the day after Manugistics reported fourth-quarter financial results.

In the last quarter of fiscal 2002, which ended Feb. 28, the supply chain vendor's software license revenue increased to $38 million, a 70 percent jump over the year-ago quarter. License revenue accounted for about 47 percent of total quarterly revenue.

By contrast, two quarters ago, in the second quarter of the fiscal year, Manugistics reported sales of $24.8 million in software license sales, 13 percent less than the second quarter of fiscal 2001.

In a conference call Tuesday night Owens said he expects software license revenue to further increase, accounting for more than half of sales in coming quarters.

SAP continues to be the competitor Manugistics most frequently encounters in the field, Owens said. But, "SAP doesn't have the scalability to be effective at the Fortune 500-type" clients, he claimed. Yet Owens added that SAP has "done a good job raising their visibility" as a "revenue-optimization" software developer.

In related news, last week SAP added enhancements to its mySAP Supply Chain Management product, including special features for companies in the high-tech, automotive, chemical, pharmaceutical, consumer packaged goods, oil and gas, and pulp and paper products industries.

For example, new features aimed at car companies include support for procurement of materials used to manufacture different cars in the same plant, and a planning matrix that factors in activity increases or decreases to allow for most efficient use of labor resources.

The new software is expected to be available later this month.

Manugistics was trading up 9 percent Wednesday morning, to $19.23, despite a downgrade by WR Hambrecht from buy to market outperform. Analysts there cited "continuing concern" about the market for enterprise software in the second half of 2002.

SAP was trading up 50 cents to $38.02.