This contrasted with its full year results for the period ended 30 September 2011 where TechnologyOnereported a net profit of $20.3 million and revenue of $156.7million. TechnologyOne executive chairman, Adrian Di Marco, said the companyhad forecast enterprise software profit to be up between 10 and 15per cent for the full year. According to a directors report released to the ASX, research anddevelopment (R&D) continued to be a significant investment for thecompany, at $16.6 million for the half year, up 11 per cent on2011. Research and development represented 21 per cent of revenue. |
An important new area of R&D was in our next generation Cienterprise suite [CI2] and we expect it to be an important driverof sales in future years, Di Marco said in the ASX statement. In addition, the company had opened an R&D centre in Indonesiadesigned to improve support of its existing software products andemploy more staff for the same expenditure. This will allow us to reduce our R&D expenditure as a percentageof revenue, without impacting on any of our strategicinitiatives, Di Marco said. For the full year, it expects research and development expenditureto be up only four per cent.
Cloud computing was also an area of investment for the company witha pilot of the TechnologyOne Cloud underway in this half. According to report documents, the Cloudoffering will provide hardware, software and services includingbackup, recovery, upgrade and support services for Cloud customers. Our plan is to progressively roll out the TechnologyOne Cloudoffering to our customers once the trial is complete, as demandemerges, said Di Marco. The company has flagged plans to spend $200 million over the nextfive years on research and development of the Cloud platform. Our current expectations are that in the enterprise market, Cloudwill not become a major driver of sales for another two to fiveyears, so we are at the forefront of this phenomenon, he said.
In addition, the company was investing in staff training, includinga Compelling Customer Experience staff development program andTechnologyOne college where software engineering, consultation andproject management modules will be taught. Forecast While TechnologyOne s enterprise software business was resilient,Di Marco said its Plus business had been impacted by the economicclimate and its Plus revenue was forecast to be down five per centfor the full year. We will also need to manage the challenges of the UK market, aswe expect the loss from the UK business will be approximately $1million for the full year, he said. The UK will, in the coming years move from a loss position toprofit and given the size of this market, this will provide us withsignificant growth opportunities. However, the company was still forecasting a profit increase ofbetween 10 and 15 per cent.
We see continuing strong growth in our vertical markets inAustralia and New Zealand and newer products such as customerrelationship management [CRM], mobile solutions and human resourcesto move from loss making to profitability, Di Marco said. He added that the company was forecasting growth in its existingcustomer base in the coming years as customers increased theirusage of products and services. For this reason, we are investing heavily in our CompellingCustomer Experience program to ensure customers receive the highlevel of service they need, he said. Follow Hamish Barwick on Twitter: @HamishBarwick Follow Computerworld Australia on Twitter: @ComputerworldAU.
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