Here is my very biased opinion: vendors like Lawson and Ultimate should just close shop and go away. Yes it's true that they have pretty slick software, and it works pretty well in most cases, but the fact is the core architecture is terrible. These are organizations that invest huge amounts in sales and marketing and leave their clients with ugly source code. In the late 1990's when Oracle, SAP, and PeopleSoft were spending (hundreds of) millions of dollars rewriting the source code, Ultimate has this incredibly non-normalized database, and Lawson is still written with Cobol.
OK - now for the factual stuff. Basically, their marketing strategy looks to be working. The PEPM pricing is brilliant. They probably got the idea from Ceridian who is their Payroll partner.
- Recurring revenues -- consisting of maintenance revenues, Intersourcing revenues from our hosted offering of UltiPro, and subscription revenues from per-employee-per-month fees generated by business service providers -- grew by 33% for the first quarter of 2005 compared with the same quarter of 2004. Intersourcing revenues were the principal factor in the year-over-year growth in recurring revenues.
New annual recurring revenues attributable to sales during the first quarter of 2005 were $3.0 million compared with $2.0 million during the first quarter of 2004. New annual recurring revenues represent the expected one-year value from (i) new Intersourcing sales (including prorated one-time charges); (ii) maintenance revenues related to new license sales; (iii) recurring revenues from new business service providers; and (iv) recurring revenues from additional sales to Ultimate Software's existing client base.
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Gross margins increased from 50.9% in the first quarter of 2004 to 59.2% for the first quarter of 2005.
