Late entrant on its way

Swedish enterprise software company Intentia's New Zealand operations are starting to look healthy after a slow start.

The company, which sells and installs systems mainly for mid-market manufacturing, distribution and maintenance companies, competes against SAP, Microsoft Business Systems' Navision product and the former PeopleSoft/JD Edwards products.

It was a late entrant in the New Zealand market but, as many competing firms have fallen by the wayside, it has won its share of business.

Its profile was helped when it was short-listed to provide a supply chain solution for dairy giant Fonterra, a sale which eventually went to SAP.

Its most recent sale was to fertiliser company Summit-Quinphos.

Australia and New Zealand managing director Steve Ironside said licence and services revenue increased 13.5 per cent over the two countries last year.

There was no break-down for each country, but 2003 accounts just filed with the Companies Office show a profit of $855,515 on revenue of $4.97 million.

Intentia lost $1 million on turnover of $2.8 million in 2002, and just broke even on turnover of $3 million the previous year.

Globally, the company moved into profit in the fourth quarter as efforts by a new management to bring costs into line with revenues - which involved large job cuts - started to bear fruit.

The full-year loss was SEK354 million ($70 million) on revenue of SEK2.98 billion, compared with an SEK400 million loss on revenue of SEK3 billion in 2003.

Allan Davies, Intentia's marketing head, said the company now had costs under control and could benefit from the industry turmoil.

"In the traditional mid-market sector we see a lot of customers who have particular values and ways of doing business," he said.

"In many cases, the last thing they want is an SAP or Oracle solution, not because it is bad but because it does not reflect the way business is done in the mid-market.

"Intentia is one of the few vendors with a future in that market. The reason new investors came in is because we have a product."

He said many competitors were selling products developed in the 1980s, which were relatively inflexible and limited compared with more recent systems.

Like many of its competitors, Intentia's Movex product was initially designed for the IBM AS/400 platform.

Intentia rewrote it in Java, a long and expensive process which caused the Stockholm sharemarket to downgrade the stock.

"Intentia took incredible pains to be the first company to do an enterprise level product on Java before Java was ready," Davies said.

"But it means we have a viable platform for the next 10 to 15 years,"

The challenge was to increase maintenance revenue in Europe and build up reseller channels.

Ironside has stepped down from the company after heading the Australasian operations for 10 years.

His replacement is Linus Parker, a former managing director of Intentia UK.