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We have looked at many survey results, but there is another indicator which I have not talked about for some time. The financial results and the number of deals signed by the various SPM vendors can give us a picture on how well the ICM industry is doing… And it’s that time of the year when vendors are starting to report their 2008 performance.
Merced Systems:
Merced Systems, the leading provider of Sales and Service Performance Management software and solutions, announced today that the company grew rapidly in 2008, posting record sales amidst the global economic slowdown. Highlights include the signing of multiple North American Incentive Compensation Management customers and over 100% growth in Software as a Service (SaaS) revenue. Merced Systems reached $40MM in annual sales for the first time in company history.
Varicent:
The full 2008 results are not available yet, but this press release shows Varicent’s performance up to and including Q3.
Revenue results were strong for both quarters driven by a number of new customer acquisitions and significantly larger orders for Varicent SPM. Q2 revenue was up 40% over Q1 2008 and in Q3, Varicent generated record revenues and a 35% revenue increase over Q2 2008 showing evidence of a growing market demand for Varicent solutions.
Xactly Corporation:
In the 12 months ending December 31, 2008, Xactly achieved more than 140 percent increase in recurring revenue and an 87 percent year-over-year increase in total revenue. The company also added to its customer base, with a third of existing customers adding new modules or subscribers, and increased its total number of subscribers by 84 percent.
Callidus Software:
Callidus’ Q4 earnings conference call is only scheduled for next Tuesday, Jan 27 at 4:30pm Eastern. I’ll add to this story when we get the details, but I think we will see some growth from them as well.
Other Vendors
And there are all the other vendors. All of these companies (with the exception of Callidus) are private, so there is no requirement to report on their performance. Some of them will probably release some news in the next few weeks, but I just wanted to reassure that if they are not listed here at the moment, it does not mean that they are not doing well.
To answer my question…
So, how healthy is the incentive compensation industry? 2008 was a good year; even Q4 was good despite the economy. Maybe the recession will catch up with some of the vendors eventually, but so far it looks like most vendors are doing well and have many good deals in the pipeline (no pun intended Callidus). And this confirms that there is still a strong demand for sales performance management solutions, at least up to now.
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