Another very good year – but what happens next?
Only a month late in posting what I aim to be the quarterly blog! And what a few weeks it has been – we appear to have been watching the western world’s financial system implode. This, of course, has had an impact on business and makes planning for next year very difficult – if not simply impossible.
I echo the sentiments of John Chambers, CEO of Cisco who is quoted in the Financial Times as remarking it was “difficult to provide a forecast given the dramatic variability”.
What makes it more bizarre from our perspective is that we are in the process of having a very, very good year and had been planning a modest expansion for next year. We will have more than doubled our revenue (again – 2nd year running) and were in the process of recruiting when it became blindingly obvious that caution was advisable and cash would be king. So, with expansion plans on hold we prepare to close out this year and wonder what will happen next year.
However, before we look ahead lets look back. Personally it been a frantic summer with a long family holiday in Africa followed by a short one in Spain (yes, we Europeans like our vacations) which gave way to the ‘standard’ September through to Thanksgiving rush. This period is ‘conference season’ and, for me, that means travel.
In the nine weeks of September and October I have been on five trips including one to Malaysia and three to the USA. Basically I have been on the road every other week and have the same schedule to Thanksgiving – another two trips to the USA in November and then, in early December one trip to Barcelona for the DIA EDM conference - then I’m done. Phew. I’m finalising this text at the departure gate in Terminal 5 at Heathrow. Next blog I promise to rant about Terminal 5 – but that is another story.
The three US trips have been for exhibiting and speaking at conferences, namely: RAPS in Boston, the Master Control user conference in Salt Lake City, the EMC CMA in Philadelphia and AMWA in Louisville. On the whole these have been positive experiences and will result in business. We have yet to come the DIA eCTD conference in San Diego, the Open Text user conference in Orlando and the DIA EDM conference in Barcelona.
Attending the conferences is not only good for business, its ‘mandatory’ if you want to be in the loop and find out what is happening to whom and how – ie good old fashioned gossip. It useful to know who is winning, who isn’t and the general word on the street. Its also a great opportunity to put faces to names and we love having existing clients and users (most of whom we have never met) drop by the booth to say ‘hi’.
So to those who take the time to drop by - thank you for taking the time to tell us how much you enjoy working with PleaseReview or, in the very small minority of cases, where you have an issue, thank you for giving us the opportunity to discuss it and put it right.
So this time of year is a long slog on and off planes with a fleeting visit home every other week. However, motivation is easy if things are going well and life is good at the moment. Revenue is high, confidence is high and we working on the much anticipated but much delayed v4 of PleaseReview.
A little bit of competition for PleaseReview is beginning to emerge – mainly based around SharePoint which has too many disadvantages to mention here – but competition is healthy. We feel very well positioned. We have well proven market leading technology, an established mature user base, an established mature product and no shortage of new ideas going forward.
In terms of product management, we are on the point of releasing PleaseReview v3.6. This release will tidy up and finalise some issues left over from v3.5 and includes a major slug of new functionality which permits even tighter integration with 3rd party systems. This functionality has been built for a specific client but, as with everything we do, is fundamentally generic and available as part of the standard product. There will be a v3.7 release before Christmas to cover a release of the SharePoint integration but, from a PleaseReview perspective, it will be functionally identical to v3.6.
We have announced a series of confidential client and prospect briefings to ensure that everyone is well prepared for v4.0 when it hits the streets in Q2 2009. Once again I think we will be taking the lead in the whole area of document authoring collaboration and will be setting the pace.
When we formally released PleaseReview v1.0 back in January 2005 (it was in beta in 2004) I reckoned we had an 18 months lead on the market. I was wrong. It was more like 3½ years and I see no sign of this lead diminishing – famous last words!
There is, of course, the thought at the back of our minds that, with the lead we have, we should raise a load of venture capital and throw a significant amount of marketing resource at consolidating our lead. This is a refrain I keep returning to for the simple reason it’s a subject we need to keep re-evaluating. Regardless of whether ‘now is the time’ in terms of the business cycle, it’s a philosophical debate. Both Clare Beazley (our CFO) & I have been through the VC route previously and know what to expect. On the few occasions that we have spoken with VCs we do get the feeling that they would like it if we were ‘less experienced’. I think it’s an attitude issue. VCs like to think they are bringing something to the table other than cash, but generally they aren’t. So, if we wished to do anything, it’s a question of finding someone who is comfortable with our view which is quite simply ‘we know what we are doing – you are simply the cash source – so divvy up and let us get on with it’. Someone recently pointed me at the sorry tale of ArsDigita by Philip Greenspun as to what can (and regularly does) go wrong with the input of venture capitalists.
So currently we are happy and not planning any external investors. We are cash rich (yes, its been a good year) and have a significant percentage of next years’ overheads covered by recurring revenue. Thus, even if we lose some of these revenues, we enter the uncertainty of next year with the hatches battened down expecting to survive and even thrive in the storm.
So that leads us to ‘what happens next year’. Great question! I don’t think anyone knows. We obviously are very dependent on the USA market and, I guess, that will depend on what happens economically over the next 12 months. I return the Mr Chambers’ comments: “it is difficult to provide a forecast given the dramatic variability”.
We know that we are in the budgets of several companies for next year so we assume and hope that they will get to spend their budgets. Time will tell.
The Life Sciences business is generally long term and considered, by some, relatively recession proof. However, now, about 50% of our revenue comes from outside life sciences and we suspect that these markets will suffer. As a counter to that the £/$ has been moving our way of late making every $ of revenue worth more in £. However the fall in the value of the £ means that the cost of the Malaysian operation has risen. As our $ revenue is higher than our Malaysian Ringit expenses, ultimately, a weak £ suits us well. Oh, and by the way, please do not expect our US$ prices to fall next year as a result. We price the software in US$ and then convert to other currencies. Also, over the last couple of years, we have taken the pain (the £ was at $2.10 at one point) so we look forward to the gain.
So, our plan is simple. We will keep our heads down, we will continue to work hard, make great great software which people want to buy and be very well positioned for the upturn.
I echo the sentiments of John Chambers, CEO of Cisco who is quoted in the Financial Times as remarking it was “difficult to provide a forecast given the dramatic variability”.
What makes it more bizarre from our perspective is that we are in the process of having a very, very good year and had been planning a modest expansion for next year. We will have more than doubled our revenue (again – 2nd year running) and were in the process of recruiting when it became blindingly obvious that caution was advisable and cash would be king. So, with expansion plans on hold we prepare to close out this year and wonder what will happen next year.
However, before we look ahead lets look back. Personally it been a frantic summer with a long family holiday in Africa followed by a short one in Spain (yes, we Europeans like our vacations) which gave way to the ‘standard’ September through to Thanksgiving rush. This period is ‘conference season’ and, for me, that means travel.
In the nine weeks of September and October I have been on five trips including one to Malaysia and three to the USA. Basically I have been on the road every other week and have the same schedule to Thanksgiving – another two trips to the USA in November and then, in early December one trip to Barcelona for the DIA EDM conference - then I’m done. Phew. I’m finalising this text at the departure gate in Terminal 5 at Heathrow. Next blog I promise to rant about Terminal 5 – but that is another story.
The three US trips have been for exhibiting and speaking at conferences, namely: RAPS in Boston, the Master Control user conference in Salt Lake City, the EMC CMA in Philadelphia and AMWA in Louisville. On the whole these have been positive experiences and will result in business. We have yet to come the DIA eCTD conference in San Diego, the Open Text user conference in Orlando and the DIA EDM conference in Barcelona.
Attending the conferences is not only good for business, its ‘mandatory’ if you want to be in the loop and find out what is happening to whom and how – ie good old fashioned gossip. It useful to know who is winning, who isn’t and the general word on the street. Its also a great opportunity to put faces to names and we love having existing clients and users (most of whom we have never met) drop by the booth to say ‘hi’.
So to those who take the time to drop by - thank you for taking the time to tell us how much you enjoy working with PleaseReview or, in the very small minority of cases, where you have an issue, thank you for giving us the opportunity to discuss it and put it right.
So this time of year is a long slog on and off planes with a fleeting visit home every other week. However, motivation is easy if things are going well and life is good at the moment. Revenue is high, confidence is high and we working on the much anticipated but much delayed v4 of PleaseReview.
A little bit of competition for PleaseReview is beginning to emerge – mainly based around SharePoint which has too many disadvantages to mention here – but competition is healthy. We feel very well positioned. We have well proven market leading technology, an established mature user base, an established mature product and no shortage of new ideas going forward.
In terms of product management, we are on the point of releasing PleaseReview v3.6. This release will tidy up and finalise some issues left over from v3.5 and includes a major slug of new functionality which permits even tighter integration with 3rd party systems. This functionality has been built for a specific client but, as with everything we do, is fundamentally generic and available as part of the standard product. There will be a v3.7 release before Christmas to cover a release of the SharePoint integration but, from a PleaseReview perspective, it will be functionally identical to v3.6.
We have announced a series of confidential client and prospect briefings to ensure that everyone is well prepared for v4.0 when it hits the streets in Q2 2009. Once again I think we will be taking the lead in the whole area of document authoring collaboration and will be setting the pace.
When we formally released PleaseReview v1.0 back in January 2005 (it was in beta in 2004) I reckoned we had an 18 months lead on the market. I was wrong. It was more like 3½ years and I see no sign of this lead diminishing – famous last words!
There is, of course, the thought at the back of our minds that, with the lead we have, we should raise a load of venture capital and throw a significant amount of marketing resource at consolidating our lead. This is a refrain I keep returning to for the simple reason it’s a subject we need to keep re-evaluating. Regardless of whether ‘now is the time’ in terms of the business cycle, it’s a philosophical debate. Both Clare Beazley (our CFO) & I have been through the VC route previously and know what to expect. On the few occasions that we have spoken with VCs we do get the feeling that they would like it if we were ‘less experienced’. I think it’s an attitude issue. VCs like to think they are bringing something to the table other than cash, but generally they aren’t. So, if we wished to do anything, it’s a question of finding someone who is comfortable with our view which is quite simply ‘we know what we are doing – you are simply the cash source – so divvy up and let us get on with it’. Someone recently pointed me at the sorry tale of ArsDigita by Philip Greenspun as to what can (and regularly does) go wrong with the input of venture capitalists.
So currently we are happy and not planning any external investors. We are cash rich (yes, its been a good year) and have a significant percentage of next years’ overheads covered by recurring revenue. Thus, even if we lose some of these revenues, we enter the uncertainty of next year with the hatches battened down expecting to survive and even thrive in the storm.
So that leads us to ‘what happens next year’. Great question! I don’t think anyone knows. We obviously are very dependent on the USA market and, I guess, that will depend on what happens economically over the next 12 months. I return the Mr Chambers’ comments: “it is difficult to provide a forecast given the dramatic variability”.
We know that we are in the budgets of several companies for next year so we assume and hope that they will get to spend their budgets. Time will tell.
The Life Sciences business is generally long term and considered, by some, relatively recession proof. However, now, about 50% of our revenue comes from outside life sciences and we suspect that these markets will suffer. As a counter to that the £/$ has been moving our way of late making every $ of revenue worth more in £. However the fall in the value of the £ means that the cost of the Malaysian operation has risen. As our $ revenue is higher than our Malaysian Ringit expenses, ultimately, a weak £ suits us well. Oh, and by the way, please do not expect our US$ prices to fall next year as a result. We price the software in US$ and then convert to other currencies. Also, over the last couple of years, we have taken the pain (the £ was at $2.10 at one point) so we look forward to the gain.
So, our plan is simple. We will keep our heads down, we will continue to work hard, make great great software which people want to buy and be very well positioned for the upturn.
posted by David Cornwell, PleaseTech Ltd at 12:22 PM
0 Comments:
Post a Comment
<< Home