Changing Landscape

We at Intraware tend to sell our SubscribeNet service to corporations larger than ourselves; sometimes much larger, as in the case of IBM, EMC or McKesson. A question from them over the years has been whether Intraware would be around to support them in the long run. Today, given our customer base, cash position, and recent quarterly news, our existing and potential customers are no longer asking that question from a financial perspective, but from a concern regarding the current climate of consolidations. It is a legitimate concern and a question for which there really is no answer – we’ve all watched large companies like PeopleSoft, BEA, Macromedia or Business Objects get gobbled up. So, no one is safe.

Our particular market place has gone through some interesting change in the last few months. Macrovision, a company with which we’re deeply entwined for a variety of reasons, decided to sell it’s software division. So that which was much bigger is now much smaller – although still a large participant in our field. Whether their new management will choose to focus on the competitive elements of our respective offering or the complementary components is yet to be seen – certainly the previous groups’ response was focused on the former at the expense of the latter.

We also saw OCS, a competitor in the licensing space, come full circle and return to their roots. OCS was originally a spin out from Modus Media and is now part of CMGI or ModusLink. Going into this fiscal year our sales team believes there is increased interest from hardware and device companies in software and license delivery. We view the OCS acquisition partly in this light – validation that others perhaps are seeing an increase in interest from similar quarters and their existing customer base.

Lastly, we saw LTG – part of ASAP software – acquired by Dell. Although more of a peripheral competitor, it was part of an interesting year of regular change in the competitive environment. Speaking of peripheral impacts, it was a highly turbulent year in the CDN market with the “arrival” of Limelight. While we’ve seen some settling down in that arena of late it certainly added to an overall feeling of significant change over the last twelve months.

That leaves us heading into a new fiscal year where our core business is still firmly founded in a belief that a combination of our hosted model, financial stability, customer base, entrenched partnerships and experience give us the confidence to continue to compete in an ever changing market place. This could be a very trying year from a macro perspective and one that reinforces the benefits of having recurring revenue streams and large customers.