According to Gartner, global spending on software-as-a-service (SaaS) is projected to grow 18% this year to $14.5 billion. The market is projected to be worth $22.1 billion by 2015. Growth will come from emerging markets of Asia Pacific and Latin America, both of which will grow nearly 27% to $934.1 million and $419.7 million, respectively. North America is projected to grow 17% from $7.8 billion in 2011 to $9.1 billion, with Western Europe markets projected to grow 19% to $3.2 billion. Japan will see the slowest growth at 16% to $495.2 million in 2012. SaaS player Concur is gearing up to tackle these emerging markets.
Concur (Nasdaq:CNQR) saw Q2 revenues grow 28% over the year to $108.4 million, ahead of the market’s projected revenues of $105.9 million. EPS of $0.33 was also ahead of the Street’s targeted EPS of $0.28.
For the current quarter, Concur projects revenues to grow 26% over the year and EPS of $0.31. The Street projects EPS of $0.20. Concur also revised up their fiscal year guidance to revenue growth of 26%, compared with 25.5% projected a quarter ago. They project full-year EPS at $1.31, ahead of the Street’s target of $0.84.
Concur’s Focus on India and Japan
Analysts believe that India holds the biggest corporate travel market in Asia. Business travel in the country is projected to be worth $1 billion. Concur estimates that despite these values, a mere 5% of enterprises have a defined travel and entertainment (T&E) policy in place. To get bigger inroads into this market, Concur has adapted some of their tools to cater to Indian organizations. For instance, travel spending in many companies in India is controlled through the initiation of a pre-travel authorization, a feature that is now present in the platform they launched for India. In addition, Concur acquired a minority stake in India’s domestic travel company, Cleartrip, for $40 million. Besides their existing relations with American Express, Concur also tied up with the ICICI Bank, a leading bank in the country, to promote their travel tools.
Concur is also growing their presence in Japan. Last quarter, they launched Concur Expense, their expense management solution customized for Japan. According to Concur, Japanese organizations are turning to cloud and mobile platforms to control travel spending. Concur Expense has features such as automatic uploading of travel dates, cost information and route searches. The tool is supported in Japanese by staff based out of Japan.
Besides customizing tools for a particular region, Concur is also working on a “personalized commerce opportunity.” In my interview with Steve Singh, CEO of Concur, he described how Concur is developing the ability to use “information not just for the purposes of being able to analyze trends but then also feeding it back into the application set” so as to offer to the user options that best meet not only their corporate policies, but also their personal preferences. You can read my interview with Singh here.
The stock is trading at $61.85 with a market cap of about $3.39 billion. It touched a 52-week high of $65.42 in May 2011.
NetSuite’s (NYSE:N) Q1 revenues grew 30% to $69.3 million, beating the market’s projections of $67.9 million. Revenue growth was driven by subscription and support revenues growing 27% to $58.0 million. EPS of $0.06 was ahead of the market’s expectations of $0.03.
NetSuite Launches Commerce-as-a-Solution
Recently, NetSuite released an offering to help customers build retail operations using a web design team. The new software, dubbed “commerce-as-a-solution,” will simplify the online retail operations of organizations. NetSuite claims that the software is like a commerce back office that will let web designers plug into the system and develop their own e-retail operations so that “anyone can be Amazon.” The company is also expanding this offering by tying up with payment partners such as Square to offer customers online payments software.
NetSuite is trading at $46.92 with a market cap of $3.29 billion. It touched a 52-week high of $51.78 at the end of the previous quarter.