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The Haves and Have-Nots of the ERP Software Industry

Several enterprise resource planning (ERP) software companies have already put the great recession behind them, regained their footing and are posting respectable growth. However, much like the macro economy, the distance between the “haves” and the “have-nots” continues to widen.

Oracle (NASDAQ: ORCL) started off the earnings seasons in December when they announced a very strong November quarter. Revenue for the quarter totaled $8.6 billion, up 47% from the prior year. Though it should be noted that approximately $1.8 billion of that growth came from the Sun Microsystems acquisition. But even without the acquisition, applications license revenues were up 21% over the same period a year earlier.

SAP (NYSE: SAP) reported revenue of $5.4 billion in the quarter ended December 31st, 2010, up from $4.3 billion a year earlier. Roughly 10% of this growth resulted from foreign currency fluctuations which moved in SAP’s favor relative to 2009. Digging deeper, software license revenue grew 35% to roughly $2.0 billion, up from $1.5 billion in Q4 2009.

Lawson Software (NASDAQ: LWSN) saw revenues grow only 2% year over year in its quarter ended November 30th, 2010. The growth came from an increase software maintenance revenue – a sign that customers are sticking around, but sales of new software licenses declined 7% (6% at constant currencies) to $26.4 million. The company also continues to deliberately shift consulting work to partners, which reduced that side of the business 10% to $63.6 million.

QAD (NASDAQ: QADA) was the only ERP vendor to report a decline in year over year revenue. Sales declined 1% in its quarter ended October 31st, 2010. License revenue declined 19% to $6.8 million, from $8.4 million in the same quarter a year earlier. Maintenance revenue declined 2% to $33.2 million from $33.8 million in the same quarter a year earlier. Management said the company is controlling costs to maintain a solid balance sheet, while expecting that an improving manufacturing sector and a new on-demand offering will lead a return to growth later this year.

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