Sitecore, a famed .NET Web CMS vendor, announced that its 2008 revenues have grown by over 100% over the prior fiscal. Reportedly, 95% of revenues are coming from new license sales, 4% -- from training and less than 1% -- from Professional Services.
While this kind of revenue percentage distribution may seem kind of funky to some, knowing Sitecore's focus on software development and exclusive outsourcing of PS and related implementation activities to its third-party integrators and partners -- we are not surprised.
Additionally, we aren’t surprised by the fact that several researchers and customers report that the MS Vista-GUI-fied product is generally more developer- than end user-friendly.
However, over 98% of Sitecore customers worldwide renewed their technical support and product upgrade programs provided directly by Sitecore, according to the company.
We, of course, cannot verify these financial reports due to a privately-held nature of the company, so we have to rely on the information provided by Sitecore.
Sitecore reports profitability in all of the past 4 years, claiming to exceed the industry's average of 15% annual growth. The net profit for the company remains over 21% of revenues.
Increasing Growth in the U.S.
As in case with some other European vendors who (semi-)recently entered the U.S. market, Sitecore reports that more than 50% of the company revenues were generated by sales activities in the United States and Canada, followed by the United Kingdom, Australia and Denmark (Sitecore’s home, sweet home).
These full-service offices provide partner and customer training, product support and sales. The employee headcount doubled worldwide to over 120 employees with over 50% in technical and R&D positions.
The number of Certified Sitecore Developers providing technical services has expanded to over 2000 globally, supporting the growth in new implementations. A new training facility was opened in San Francisco, California, in June of this year.
Why Sitecore is (Can be) Cool
Sitecore is known to lure prospective customers in by advertising its 100% .NET platform, which in the times of Redmond reign, is a relatively easy thing to sell. We’ll give it to Sitecore: while its competition has been (mindlessly, at times) fiddling with a variety of platforms and languages, Sitecore’s mind was set on .NET.
This approach has paid off, as Sitecore’s client portfolio now includes Sara Lee, Siemens, Toshiba, Omni Hotels and Atlanta Falcons -- to mention just a few.
When it comes to functionality, many Sitecore competitors – including SDL Tridion, EPiServer, MOSS and Ektron -- were known to win in customers’ short lists. The latest 6.0 release, however, brought a lot of great functionality to light making Sitecore more competitive.
As with any Web CMS, essentially, it is all about getting as close to a “perfect marriage” scenario as possible, while making sure that the chosen system can support the majority of your business requirements. Not all of them will, of course, be met to the fullest degree, but this is a quite normal game of give-and-take.
Undoubtedly, for some customers Sitecore seems to be that happily-ever-after business partner -- in part, due to more than 100 certified Sitecore partners in the U.S.
While the triple-digit growth rates are great, let’s not forget that many vendors in the Web CMS arena tend to struggle when faced with the challenge of being able to balance the supply-demand ratio.