Earlier this winter, I had the chance to dig into the BasWare product suite on an in-depth basis -- especially the e-invoicing application -- during a demo that took the better part of the morning. I was so impressed with their capabilities on the second P -- in P2P that is -- that they've made it to the top of my shortlist in recommendations in a bunch of discussions with practitioners looking at e-invoicing since then. But BasWare is not just going after the e-invoicing and EIPP market -- they offer a broader P2P suite that touches on, and goes deep into many Spend Management areas. And based on their 2008 revenue numbers, they're by far and away the second largest best-of-breed vendor in the space (and are positioning themselves to give Ariba a run for their SaaS money). As important, they’re growing. And they’re profitable. In fact, according to the above-linked press release announcing their 2008 results, BasWare’s revenue hit 86 million Euros in 2008 and “regardless of the declining market sentiment towards the end of 2008, full year net sales grew by 17.5 percent.” Basware now counts over “1,200 customers and 650,000 users in over 50 countries.”
At this point, most North American readers are probably asking the question: why don't I know more about these guys?
The answer is simple. They haven't placed a huge emphasis on growth in the North American market. Europe is where they're best known. But I think this is going to change quickly. When I was in the UK in December, I had the chance to sit down for a brief chat with Steve Muddiman (ex-Ariba) who joined BasWare in 2008 to head their global marketing effort. He reiterated their commitment to continuing their focus on global growth, placing particular emphasis on the US market. From this conversation and this other recent announcement, it's clear that BasWare has some big things planned in the coming years -- in North America and beyond.
According the above-linked press release, for 2009-2012, BasWare is forecasting that their "long term net sales growth objective remains in the range of 20-40 percent with operating profit margin of 10-20 percent of net sales." Since BasWare is a public company, we can, and should, put a good deal of stock in this announcement, as it represents financial guidance to shareholders. But where will the growth come from? In the announcement, BasWare notes that they will "grow in all of its markets. US, UK and Germany will remain in strategic position. The main focus is on the US market with more weight on the direct operational model ... In customer segmentation, a special focus area is large multinational companies which operate across several market areas."
To meet their growth objectives BasWare will continue to sell both enterprise software and SaaS-basd products, including launching a "new EPP (Enterprise Purchase to Pay) Automation" solution. In a couple of up-coming posts on BasWare in February, I plan to dig into their application suite in detail, outlining its strengths and weaknesses relative to the market. Despite their previous lack of sales and marketing presence in North America -- outside of a small team -- my analysis suggests that if they ramp up their efforts, good things will come of it. Many of their products stack-up well in – and in at least one case, lead -- the market (more detail on this to follow in subsequent posts), customers appear loyal and satisfied (I spoke to a few at a user-event last year), and they have a good understanding of how to bridge the technical and process gap between procurement and finance, especially in the A/P area. All of which bodes well as BasWare ramps up in North America and worldwide just as procurement organizations, CFOs and controllers are looking for new ways to reduce cost and supply risk in the recession.
- Jason Busch