Adobe + Day Software Coming Together: Cautious Optimism

The Enterprise Software space is undergoing big change. No, I am not talking about just the shift to SaaS, Cloud, Potentially increasing spend etc. Its seeing momentum of a different kind - form a moment of pause, it is getting rediscovered as being sexy again. Different enterprise players make different moves to sort of remain relevant and continue their growth. This week, Adobe announces its plan to buy Swiss software maker Day Software. Day Software is a content management company focused on the high growth markets of Web Content Management, Digital Asset Management, Social Collaboration and Targeting & Optimization. A quick reading shows that following Adobe’s acquisition of Omniture in September 2009, this move by Adobe is clearly aimed at getting into the web experience management (WEM) market place . The expectation here is that Adobe would help its customers through its combined offerings the capabilities to bring together the audience insight gained through the web analytics of Omniture and Day’s CRX content platform. The acquisition price is about US$240 mn, a 67% premium over Day’s last 90-day average price. Analysts note that Day Software had $44 mn in TTM revenue (based on filings and current exchange rate) and has been growing at 40% yoy. Goldman Sachs estimates the EV value of Adobe to be about $214 mn, which implies an EV/LTM revenue multiple of 5.1X vs. 5.0X for Adobe’s Omniture acquisition.

Day has been positioning itself as a leader in the web experience management space for a while. Web experience management, sometimes called customer experience management acts a single platform to manage all interactions, across a variety of apps and business systems like ERP, CRM etc. Day’s products like Web CMS CQ5 and their content repository CRX will become integral bedrock to this solution set. Adobe has outlined its vision of leveraging the benefits of Day being a leader in the WEM market and a as a heavyweight in developing the concept of next generation content management with focus on web experience. Day comes with an array of capabilities – particularly its Social Collaboration and CQ 5.3 Personalization, Segmentation and Targeting capabilities make its case as a leading player in the arena of web engagement.

Day Software has been making substantial efforts to improve on their capabilities and were sort of repositioning themselves as THE WEB EXPERIENCE management Company for some time and were building rich functionalities centered around personalization, collaboration and analytics leveraging its content repositories. A robust content repository integrated well with a variety of functionality centric add-ons one that can integrate with social networks is a killer combination and that’s the direction that Day was moving towards. A larger company like Adobe with higher resources and a killer analytics product like Omniture in its stable can potentially create a new momentum for Day’s product. The integration roadmap would be a key thing to watch here. Day might be less known in US corporate circles given that it is Europe headquartered and most of the leading CMS players are US headquartered, but Day has widely known in the open source and open standards community. Day has been an active contributor to the Apache projects like Sling & Jackrabbit and the open source community is watching to see how Adobe will work on this moving forward. Similarly Day has been a big supporter of CMS repository standards (JCR and CMIS, JSR standards) and it has to be seen what direction Adobe would like to take moving forward post the acquisition. For some, Adobe and open standards represent opposite ends of the spectrum!

For Adobe, a big player in the creative and front end space, this deal is significant, as it helps them to do two things:

A. First time Adobe gets a real shot at getting a slice in the back end – content management space – traditionally they have partnered to get a grip on this space and have made limited impact with their own efforts in getting there thus far. It’s a paradox that was unfathomable for awhile and with this move, Adobe gets a real crack at it.

B. Adobe, based on the nature of their core business has been mostly doing shrink wrapped solutions whereas a content management solution has to be sold to enterprises as an infrastructure with different sales and support mechanisms.

However, for their customers, some answers to questions /scenarios like these are very important :

A. How would Adobe help move Day’s offering into cloud – given Omniture’s experience in the cloud and Adobe’s clickstream and how much and which way these could be brought to work with Day’s software. (Moving transactional data and content into the cloud is the hottest area for enterprises today – this is a VERY BIG OPPORTUNITY here)

B. Day’s customers would be hoping that Adobe keeps the direction of the product evolution in its core areas and can invest more and accelerate research and development besides potentially integrating with Omniture and Adobe’s content creation tools.

C. Adobe has OEM’d Alfresco in some of its Livecycle Enterprise - how classy Day product could integrate there is an open issue.

D. Cultural Integration : Day Software is Swiss based software maker and Adobe is primarily based in the Silicon Valley and ably supported by their teams in India – this is going to be kind of tough getting them together . (My view is for Adobe to leverage Day’s talent besides in integrating Day products with Adobe by leveraging them to work in Adobe platforms like Extensible Metadata Platforms

The risks of enterprise software mergers and integration are well know but in this case , the space is a reasonably neat fit (with some minor conflicts) but the upside possibilities abound!. The hidden value is to bring together content creation, content management and analytics together and straddle the transaction to analytics value chain - this is indeed a great space to play in. On the whole, upside for Day’s customers exist but Adobe needs a very finely thought out plan, to be executed really fast and with sophistication for this marriage to deliver and endure well enough

Meet our Chief Financial Officers

We have over 5,000 actively networking Chief Financial Officers (CFOs) in our membership.  Our key group is http://www.tgleaders.com/group/chief-financial-officer


Collectively they have led over 1,100 companies in over 100 industries in 40 countries.  


Below is a summary table of the larger companies that our CFOs are or were with.  Below that is a list of the 40 largest companies in this list.

https://www.tgleaders.com/group/chief-financial-officer

TOP 40 MEMBER COMPANIES - Sorted by Annual Revenue
Count	Company **	Total Revenue ($USDmm)
1	Novartis AG	$    56,966
2	Deutsche Bank AG	37,837
3	Hess Corporation	32,137
4	New York Life Insurance Co.	27,322
5	BofA Merrill Lynch	24,842
6	TUI AG	23,629
7	KBR, Inc.	17,698
8	Constellation Energy Group, Inc.	15,316
9	Land O Lakes Inc.	13,089
10	Royal DSM N.V.	11,369
11	Yara International ASA	9,062
12	Sonae SGPS SA	8,714
13	Tamro Oyj	7,955
14	Cooper Industries plc	7,821
15	The McGraw-Hill Companies, Inc.	7,607
16	MetroPCS Communications, Inc.	6,871
17	Infosys Technologies Ltd.	6,795
18	Franklin Resources Inc.	6,432
19	Flowserve Corp.	6,011
20	FMC Technologies, Inc.	5,534
21	Life Technologies Corporation	5,330
22	Hydro One Inc.	5,313
23	Jones Apparel Group, Inc.	5,088
24	Lifepoint Hospitals Inc.	4,941
25	YRC Worldwide Inc.	4,843
26	Global Crossing Ltd.	4,228
27	H&R Block, Inc.	4,088
28	Borders, Inc.	3,903
29	Banco Itau BBA SA	3,471
30	Borders Group, Inc.	3,318
31	Anadolu Efes Biracilik	3,194
32	Schnitzer Steel Industries Inc.	3,110
33	Salesforce.com	2,989
34	FMC Corp.	2,892
35	Terasen, Inc.	2,891
36	Teleflex Incorporated	2,807
37	Huhtamaki Oyj	2,726
38	Euronet Worldwide Inc.	2,650
39	Dun & Bradstreet Corp.	2,574
40	IMS Health Inc.	2,492
	Total	$ 405,852

Apple Earnings Blowout - It's Going To Be Huge!

Congratulations to Apple & Steve Jobs for providing a good solution yesterday to the iPhone 4 antenna problem... Every iPhone 4 user will get a free case! This is a good response from Apple, and will hopefully allow users to fully appreciate their new iPhone 4, and be very happy about their purchase!!

Did you catch the iPhone 4 Antenna song that Apple played in their news conference yesterday... very funny!


Expect Apple to deliver another blowout quarter when it announces earnings this week...

According to Yahoo Finance, the average earnings estimate by 40 analysts is for Apple to earn $3.10 a share this quarter, with a low estimate of $2.65 and a high estimate of $3.47. I wouldn't be surprised if Apple breaks free and announces earnings well over $3.47 a share...

The average revenue estimate by the same 40 analysts is for Apple to make $14.74 billion this quarter, with a low estimate of $13.82 billion and a high estimate of $15.74 billion... Again, it's very likely that Apple will report revenue on the very high end of the estimate, perhaps even surpass the $15.74 billion mark!

What's going for Apple to have a huge earnings blowout?

1. iPad - more than 3 million iPads were sold in the quarter, accounting for at least $1.5 billion in new business.
2. iPhone 4 - at least 1.5 million new iPhone 4 sales happened in June. This one is tricky though... Did the launch of iPhone 4 stall the sales of iPhone 3GS? Let's hope that it did not; total sales of iPhones for the quarter could end up above the 9 million mark...
3. MACs - Intel just announced that they had the best quarter in history on the sales of the microprocessors that power the majority of computers worldwide! Apple is becoming a leading player in contributing to the sales of Intel processors, and it's plausible that Apple had a huge quarter for MAC sales...

All eyes will be on Apple as it announces perhaps the biggest & baddest earnings quarter in Apple history!!

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What is Apple's Innovation Strategy? Download these Apple Innovation eBook insights and learn to be like Apple... like Steve Jobs, the innovator and CEO of Apple.

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And we've always tried to do that at
Apple. Since the very very beginning.
And we always will." -Steve Jobs

Apple innovates through:
• Creativity and Innovation
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• Innovation in Business Model
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Apple has built an Innovation Factory – one that harnesses creativity in its people, stimulating new ideas, and launching successful, profitable new innovations... Apple leverages its diverse culture, innovation processes, partners and networks to seize the new opportunities in the marketplace and grow its business...exponentially…

How did Apple do it?
• Increase revenue more than 400% in 8 years…
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References:
Yahoo Finance
Apple.com

Meet Our Chief Legal Officers

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Our Chief Legal Officer group as over 1,100 actively networking members who provided legal leadership for over 500 companies in 27 countries.  Their expertise range broadly from experiences in 94 different industries.

Information on our Chief Legal Officer group can be found at our website: The Chief Legal Officer

You can also see some of our members at our related LinkedIn Group:  Legal at LinkedIn

Summary group statistics follow, along with revenue by region and sector for our actively networking members.

To register for The Global Leader, go to www.tgleaders.com.  The Global Leaders is the largest exclusive network of senior leaders in the world.  See the statistics at www.tgleaders.com.  

Group Statistics  

Revenue of Member Companies by Region and Sector ($ Millions)

Member top 40 Companies by Revenue

THE CHIEF LEGAL OFFICER
http://www.tgleaders.com/group/chief-legal-officer
Data Date:		15-Jul-10
Top 40 Member Companies		Total Revenue ($USDmm)
International Business Machines		$         96,906
Microsoft Corporation		59,544
Credit Suisse AG		31,217
UBS AG		25,020
New York Life Insurance Co.		22,246
Coca-Cola Enterprises Inc.		21,563
CNH Global NV		14,014
Highmark Inc.		13,694
Qwest Communications International		12,104
Reed Elsevier Group Plc		9,807
Citigroup Global Markets Limited		7,080
Atmos Energy Corporation		4,665
Biogen Idec Inc.		4,450
ARYZTA AG		4,215
Hanesbrands Inc.		3,961
Del Monte Foods Co.		3,740
DynCorp International Inc.		3,585
DynCorp International LLC		3,585
Tata Communications Limited		2,455
AirTran Holdings Inc.		2,405
Blue Square Israel Ltd.		2,004
ScanSource, Inc.		1,974
Origin Enterprises Plc		1,937
Apollo Tyres Ltd.		1,811
Allen & Overy LLP		1,639
Amedisys Inc.		1,585
IDT Corporation		1,419
Salesforce.com		1,378
XM Satellite Radio Holdings Inc.		1,297
XM Satellite Radio, Inc.		1,248
Barnes-Jewish Hospital		1,243
Tech Mahindra Limited		1,030
Polycom, Inc.		1,018
Monster Worldwide, Inc.		866
Cree Inc.		751
VPK Packaging Group NV		746
Dallas Area Rapid Transit		739
Corporate Office Properties Trust		735
Central European Media Enterprises Ltd.		721
Winston & Strawn LLP		697
Total		$        371,092
Source:  Bloomberg

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