Amid its competitors' high-profile strategic moves (see Is "Sage" Wiser and Better Than "Best"?), Exact Software North America (www.exactamerica.com), an Andover, Massachusetts-based (US) provider of integrated accounting, payroll, customer relationship management (CRM), enterprise resource planning (ERP), business process management (BPM), etc. enterprise software solutions remains firm on a different course. Its solutions connect the people, processes, and knowledge essential to a user organization. Exact is a division of Delft, the Netherlands-based Exact Holding N.V. (Amsterdam: EXACT.AS, www.exactsoftware.com).
The corporation appears to have "backpedaled" from the bold growth projections made by its North American strategic group in 2004. At then time, it sought to double its revenue of approximately $60 million to $120 million (USD) by the end of 2006 through some aggressive acquisitions that would give it a larger market share. Instead, it appears to have intentionally shifted away from any blockbuster acquisitions to incrementally roll-out products that will give more added-value to its customers. In doing so, Exact has avoided the piling up acquired products.
The company's refined strategy has been to acquire more digestible companies with specific capabilities that support its Business Unified solution strategy, which seeks to round out integrated solutions that encompass executive control, accounting, manufacturing, distribution, on-line commerce, CRM, human resource management (HRM), document management (DM), Web portals, workflow, and more. This will empower employees, suppliers, and customers to collaborate through virtually real-time access to central Web-based corporate information and exchange. As a result, this should provide greater visibility across the organization, and maximize control, productivity, and efficiency for the entire value chain.
Exact's current plan consists of enhancing products by business type and industry segment. It seeks to continuously improve data and process integration and judiciously incorporate specific technologies that broaden its core product set by adding products that expand its market coverage and to gain human resource expertise. In other words, the vendor will continue to expand its product footprint and operations worldwide. The last few years have been a busy and transitional period for the vendor, with the deliberate acquisitions of certain resellers and partners, including the opening of new offices, and the launch of new product enhancements.
Exact Software is over twenty years old and is an international supplier of eighteen front-office/e-business and back-office/ERP solutions that somewhat differ (or are branded differently) within diverse regions of the world. The company's software is offered in over sixty countries, mostly through its own subsidiaries (with close to 2,400 employees worldwide). It also has nearly 2,000 business partners that help the vendor handle over 180,000 customers in 126 countries. For the fiscal year ending December 2004, Exact generated revenues of 212 million euros which was an increase of about three percent over fiscal 2003, while net income was 33 million euros in fiscal 2004, which was up 3.1 percent from 32 million euros in fiscal 2003.
Though it conducts business more tacitly than its bigger archrivals, Sage Group and Microsoft Business Division, Exact is nonetheless a textbook example of a vendor that is maintaining a steadfast course of product, revenue, and geographic expansion—and it is doing so while achieving enviable profit margins, including a twenty year stretch of profitability. Thus, Exact is a stable and predictable, cash-flow generating business.
Though its market approach, conservative business management, and attention to profitability have not changed, Exact Software is quite a different company now compared to what it was several years ago, owing to its many acquisitions and new product developments. The vendor can be placed among the leaders within its target market, trailing Sage and Microsoft, and fighting with the likes of Epicor Software (see Epicor's Mid-Market Pitch Becomes Higher for (One) Scala) for the top three position in the small and medium business (SMB) market. In some markets, Exact also competes fiercely with the likes of SYSPRO.
Three Strategic Groups
Exact Software's network has been divided into three geographically strategic groups: the Netherlands, North America, and International. Each strategic group has its own leader and revenue and profit and loss targets, and each addresses the specific needs of its market in a particular localized way. However, all share the corporate-level vision that a single, integrated solution should provide the best way to improve customer efficiency and productivity. To further enhance customer satisfaction and service, the entire Exact organization is linked by a single infrastructure, which provides access to the same customer database and information worldwide.
In the last few years, Exact has, even if only moderately, built on its traditional customer base in each of its strategic areas and strengthened its position in each one.
Dutch Strategic Group
With over 74,000 customers and a total revenue of 95 million euro in 2004 (compared to 93 million euro in 2003) Exact remains both the market share and mindshare software powerhouse in the Netherlands. The Dutch strategic group expands Exact's base of SMBs, and strengthens its position within the enterprise-level market. In the Netherlands, this focus has traditionally meant providing the SMB market with innovative back-office solutions, but this is now changing towards more integrated back- and front-office solutions.
While continuing to serve its traditional customer base (the SMB market) Exact is expanding its focus to the higher-end of the market, as well as to more modest midsize operations. The increased functionality of its products, such as the manufacturing and project management functionality for Exact Globe 2003, launched in mid 2004, has reportedly made Exact's solutions even more appealing to larger organizations. The Exact Globe 2003 Enterprise product addresses this market by segmenting into more solutions areas, serving an array of different businesses, including those involved in wholesale, manufacturing, retail, education, professional services automation (PSA), rental, and accountancy. Each of these areas is served with an industry template of Exact e-Synergy.
In terms of small businesses, the target in the Netherlands is the same as the rest of the world: to integrate the customer's complete organization using the combination of Exact Globe and Exact e-Synergy. To realize this long-term goal and to better meet the immediate needs of specific customer segments, Exact has three versions of Exact Globe: Exact Globe Enterprise, Exact Globe 2003, and Exact Compact 2003.
Additionally, the vendor supports its important reseller network in many ways, and the entire network has been trained sufficiently so that every reseller can now sell Exact e-Synergy. In 2004, Exact Netherlands aligned its organization to better serve market segments that seek specific industry solutions. Together with its traditionally loyal partner channel, this has proven to be successful in delivering solutions and implementations for the higher end of the SMB market in the Netherlands.
The local leading brands in the Netherlands are Exact Globe 2003 (financial software for SMBs), Exact e-Synergy, Exact Compact 2003 (financial software for small businesses), Exact Globe 2003 Enterprise (ERP software for larger corporations), Exact Financials (financial, project management and HRM software for medium and large organizations), and Grote Beer for Windows (financial software for small businesses).
The corporation appears to have "backpedaled" from the bold growth projections made by its North American strategic group in 2004. At then time, it sought to double its revenue of approximately $60 million to $120 million (USD) by the end of 2006 through some aggressive acquisitions that would give it a larger market share. Instead, it appears to have intentionally shifted away from any blockbuster acquisitions to incrementally roll-out products that will give more added-value to its customers. In doing so, Exact has avoided the piling up acquired products.
The company's refined strategy has been to acquire more digestible companies with specific capabilities that support its Business Unified solution strategy, which seeks to round out integrated solutions that encompass executive control, accounting, manufacturing, distribution, on-line commerce, CRM, human resource management (HRM), document management (DM), Web portals, workflow, and more. This will empower employees, suppliers, and customers to collaborate through virtually real-time access to central Web-based corporate information and exchange. As a result, this should provide greater visibility across the organization, and maximize control, productivity, and efficiency for the entire value chain.
Exact's current plan consists of enhancing products by business type and industry segment. It seeks to continuously improve data and process integration and judiciously incorporate specific technologies that broaden its core product set by adding products that expand its market coverage and to gain human resource expertise. In other words, the vendor will continue to expand its product footprint and operations worldwide. The last few years have been a busy and transitional period for the vendor, with the deliberate acquisitions of certain resellers and partners, including the opening of new offices, and the launch of new product enhancements.
Exact Software is over twenty years old and is an international supplier of eighteen front-office/e-business and back-office/ERP solutions that somewhat differ (or are branded differently) within diverse regions of the world. The company's software is offered in over sixty countries, mostly through its own subsidiaries (with close to 2,400 employees worldwide). It also has nearly 2,000 business partners that help the vendor handle over 180,000 customers in 126 countries. For the fiscal year ending December 2004, Exact generated revenues of 212 million euros which was an increase of about three percent over fiscal 2003, while net income was 33 million euros in fiscal 2004, which was up 3.1 percent from 32 million euros in fiscal 2003.
Though it conducts business more tacitly than its bigger archrivals, Sage Group and Microsoft Business Division, Exact is nonetheless a textbook example of a vendor that is maintaining a steadfast course of product, revenue, and geographic expansion—and it is doing so while achieving enviable profit margins, including a twenty year stretch of profitability. Thus, Exact is a stable and predictable, cash-flow generating business.
Though its market approach, conservative business management, and attention to profitability have not changed, Exact Software is quite a different company now compared to what it was several years ago, owing to its many acquisitions and new product developments. The vendor can be placed among the leaders within its target market, trailing Sage and Microsoft, and fighting with the likes of Epicor Software (see Epicor's Mid-Market Pitch Becomes Higher for (One) Scala) for the top three position in the small and medium business (SMB) market. In some markets, Exact also competes fiercely with the likes of SYSPRO.
Three Strategic Groups
Exact Software's network has been divided into three geographically strategic groups: the Netherlands, North America, and International. Each strategic group has its own leader and revenue and profit and loss targets, and each addresses the specific needs of its market in a particular localized way. However, all share the corporate-level vision that a single, integrated solution should provide the best way to improve customer efficiency and productivity. To further enhance customer satisfaction and service, the entire Exact organization is linked by a single infrastructure, which provides access to the same customer database and information worldwide.
In the last few years, Exact has, even if only moderately, built on its traditional customer base in each of its strategic areas and strengthened its position in each one.
Dutch Strategic Group
With over 74,000 customers and a total revenue of 95 million euro in 2004 (compared to 93 million euro in 2003) Exact remains both the market share and mindshare software powerhouse in the Netherlands. The Dutch strategic group expands Exact's base of SMBs, and strengthens its position within the enterprise-level market. In the Netherlands, this focus has traditionally meant providing the SMB market with innovative back-office solutions, but this is now changing towards more integrated back- and front-office solutions.
While continuing to serve its traditional customer base (the SMB market) Exact is expanding its focus to the higher-end of the market, as well as to more modest midsize operations. The increased functionality of its products, such as the manufacturing and project management functionality for Exact Globe 2003, launched in mid 2004, has reportedly made Exact's solutions even more appealing to larger organizations. The Exact Globe 2003 Enterprise product addresses this market by segmenting into more solutions areas, serving an array of different businesses, including those involved in wholesale, manufacturing, retail, education, professional services automation (PSA), rental, and accountancy. Each of these areas is served with an industry template of Exact e-Synergy.
In terms of small businesses, the target in the Netherlands is the same as the rest of the world: to integrate the customer's complete organization using the combination of Exact Globe and Exact e-Synergy. To realize this long-term goal and to better meet the immediate needs of specific customer segments, Exact has three versions of Exact Globe: Exact Globe Enterprise, Exact Globe 2003, and Exact Compact 2003.
Additionally, the vendor supports its important reseller network in many ways, and the entire network has been trained sufficiently so that every reseller can now sell Exact e-Synergy. In 2004, Exact Netherlands aligned its organization to better serve market segments that seek specific industry solutions. Together with its traditionally loyal partner channel, this has proven to be successful in delivering solutions and implementations for the higher end of the SMB market in the Netherlands.
The local leading brands in the Netherlands are Exact Globe 2003 (financial software for SMBs), Exact e-Synergy, Exact Compact 2003 (financial software for small businesses), Exact Globe 2003 Enterprise (ERP software for larger corporations), Exact Financials (financial, project management and HRM software for medium and large organizations), and Grote Beer for Windows (financial software for small businesses).
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