I don't know if this has been posted yet about CNQR. If it has, it probably bears repeating. Russ
Business News : Tuesday, November 16, 1999
Investors keep watch on Concur's potential as it starts new venture
by Monica Soto
Seattle Times Eastside business reporter
When Redmond-based Concur Technologies yesterday launched its newest venture, eWorkplace ASP, investors were watching closely.
The company, a provider of automated employee forms, announced its expansion to the Internet-application industry, charging customers a rental fee to use its software via the Internet.
Starting Nov. 1, the company's stock rose in nine straight sessions, nearly tripling from $11.125 to $32.75. The stock dropped $5.25 to $27.50 Friday, rose 50 cents yesterday, and fell $2.625 to $25.375 in late trading today. "I think the market is recognizing our leadership position relative to our competitors in this space," said Alan Brown, the company's executive vice president of global marketing, referring to the stock's recent surge. "We're really poised to capitalize on the e-commerce shift in the market."
Concur, founded in August 1993 by Steve Singh, now chairman and CEO, and Mike Hilton, now the chief technology officer, sells software that allows companies to rent cars and purchase airline tickets, computers, office supplies, 401(k) benefits and telecommunications products, all according to a firm's corporate rules and guidelines.
Roughly 275 companies, with 2.1 million employees, use Concur's services. Its blue-chip list of customers includes AT&T, Lucent, Federal Express and Baxter Health Care. With its recent launch to Internet services, the company signed up smaller clients, including Double Click, Ocean Spray and Altrak.
Meanwhile, its revenue has soared from $2 million in 1996 to $20 million in 1998 and $37 million so far this year. But its success hasn't been without growing pains.
Last month, Concur's stock plunged by $20 a share after the company announced it expected total revenue for the fourth quarter in the range of $8.6 million to $9.2 million, which includes about $5 million to $5.3 million in license revenue.
Securities analysts had estimated the company's revenue would be between $12.3 million and $12.7 million, with license revenue of about $8.1 million to $8.8 million.
Eric Upin, a senior business-to-business analyst for San Francisco-based Robertson Stephens, attributed Concur's precipitous drop to its inexperienced sales force and the company's attempt to do too much too fast.
"That's more fixable than the product doesn't work, the management team is defecting or the competitor is destroying them," Upin said.
Stockbrokers, he said, took another look at the company based on what they considered to be a strong board of directors, including members from American Express and ADP. They also took into account the company's more than 2 million licensed users, impressive customer list and placement in the business-to-business e-commerce category - which analysts say represents the next major investment cycle on the Web.
Upin said Robertson Stephens' business-to-business e-commerce index was worth $300 million in January. In September, the market cap soared to $25 billion. That figure has doubled in two months to $50 billion.
"There's a value to the Concur story," he said. "There's a huge population of users and very powerful set of products. There is still a huge opportunity for the company."
Mark Verbeck, a senior analyst with U.S. Bancorp Piper Jaffray, said the company, received a boost from the recent announcement of business-to-business partnerships between Commerce One and GM and Oracle and Ford.
Concur also announced recently that it would launch new products sooner than it had previously expected, he said.
The stock's recent surge "was a combination of positive announcements from the company, positive news in the space and an oversold stock," Verbeck said.
Jeff Saenger, Concur's vice manager for servers, said its new product, eWorkplace ASP, will capture a larger market share by catering to both ends of the business spectrum.
EWorkplace.com will act as a portal for smaller companies to subscribe to its services. For the mid- to large-size market, Concur will tailor an intranet-based application to the company's needs.
"We believe there will be a significant market for renting applications," he said. "And we'll be very well-positioned for it."
Brown, the vice president of marketing, said the company doesn't expect the new service to replace its software business.
"There's always been, at the high end of the market, a desire to put (information) behind the firewall," he said. "We wanted to be prepared to catch the middle market."
Monica Soto's phone message number is 206-515-5632. Her e-mail address is msoto@seattletimes.com
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