Lawson Pulls Out of Its Intentia Slump

The acquisition of Intentia may soon help Lawson in new markets.

Lawson Software is pulling out of the doldrums after its Intentia acquisition in 2006. The company announced June 13 that it has raised its fourth quarter 2007 earnings and revenue guidance due in part to higher-than-expected sales of its namesake System Foundation software.

Lawson sold $6 million more System Foundation licenses than it had initially projected, company officials said in a press release. The company now estimates preliminary software revenue to be between $37 million and $40 million and expects preliminary total revenues for the quarter to be in the range of $201 to $208 million.

Analysts expect a profit of $193.5 million, according to media reports.

Lawson officials also credit seasonality and better-than-expected sales performance with boosting the companys bottom line. During a May 9 interview with eWEEK—a year after Lawsons acquisition of Intentia was complete—Lawson CEO Harry Debes explained that at the end of Lawsons 2006 fiscal year the company was performing quite well. Then in May of that year (the month that ended the fiscal year) Lawson finally acquired Intentia after months of regulatory inquiries.

The acquisition hit Lawsons bottom line hard, according to Debes.

"The acquisition concluded—it took a long time—then results took a turn [toward] the negative," said Debes. "The reason is that at the former Intentia business was under some stress; revenue was not growing, there were some expenses. Operating income [at Lawson] went from 15 percent to 3 percent. By the second quarter, which ended in November, we were back on track."

But, conceded Debes in the May 2007 interview, "There is still a ways to go."

To this end, Debes said Intentia is growing and performing well. The company is fully integrated with Lawson, which now offers two product lines: M3 and S3. The former Intentia software, M3, is geared toward manufacturing verticals including fashion and apparel, food and beverage, wholesale distribution and asset-intensive industries.

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S3 applications serve the markets Lawson historically built software for: health care, retail, local government, education, banking and insurance.

Lawsons System Foundation—essentially the companys integration platform that includes IBMs middleware—was beefed up in March when Lawson announced it would include IBMs Enterprise Service Bus for services connectivity and messaging to the Foundation technology stack.

The idea with the enhanced tech stack is that users can combine IBMs ESB and Lawsons Process Flow Integrator to build, implement and integrate SOA (service-oriented architecture) applications.

Lawson plans to release its full fiscal fourth quarter 2007 results on July 26.

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