Enterprise Content Management vendor Vignette has announced it's first quarter financial results and they are a bit lower than originally expected. The lower outlook is primarily a result of a decrease in license revenues which Vignette attributes to the a decrease in spending in the North American market.
With the US economy on a decline, will we see more ECM vendors making the same announcements over the next the year?
Vignette's original outlook was for first quarter fiscal 2008 GAAP results to be between $0.01 - $0.09 per share. They are now saying to expect something between a loss of $0.03 per share and profit of $0.01 per share. Non-GAAP revenues were also lowered.
First quarter revenues outlook decreased by about $5 million from expectations of $45-50 million down to $44-45 million. Vignette says the license revenue shortfall caused a shift in their revenue mix which resulted in margins becoming much tighter. They also continue to have issues with sales force productivity.
Despite these lowered expectations, Vignette has seen growth in services revenue and they have released two new products: Vignette Recommendations and High Performance Delivery.
Chief Executive Officer of Vignette, Mike Aviles commented, “We are taking a number of actions to generate greater demand for our software by improving our sales and marketing effectiveness. We will also be looking closely at the investments planned for 2008 considering the challenges we face in the North American market, and we will continue to pursue corporate development activities that further enhance our Web Experience Platform.”
So is this lowering of expectations due to the US economy unique to Vignette? ECM vendor Alfresco just announced a "landmark financial year" 2007 with software downloads surpassing the one million mark and an a significant increase in customer bookings.
Maybe it's an open source vs proprietary software issue. Maybe it's those pesky SaaS content management vendors taking over.
Maybe it's the reality that Vignette licensing costs are huge compared to many other equally good ECM vendors.
We may to wait for the Vignette conference call/live Webcast to get the real scoop on their financial results. The call is happening April 23, 2008, at 5pm EDT. See their website to get information on the webcast portion of the call.
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