Actually, I am glad you asked esp in light of the following <<<<<Their accounts receivable indicate to me a situation where special incentives had to be given to clients to buy (these are at $25 MM vs quarterly sales of less than $15 MM, or an average of five months sales, outrageous).>>>>
Basically they are an enabler for internet commerce. They sell a packaged plumbing solution that works behind the web page to allow a company to take orders and interfaces with other systems such as R3, etc. OMKT has a industrial strengh system call Transact4 that is just bulletproof. Right now works on Unix boxes but is being ported to NT. They also bought ICAT(?), one of the I companies, anyway, and have a ecommerce solution called shopsite that allows small and medium size business to get up quickly. It interfaces with the Transact4 engine as well. They have a cataloging solution as well, and a publishing product called Folio.
Their market strategy up until about Dec has been to sell to commerce service providers i.e. isps that would buy the Transact4, and who would then be a one stop shop for small business. Also, the businesses would just pay a monthly fee instead of all those upfront costs to set up a web site. It hasn't taken off explosively to this point, probably because most of these ISPs didn't know a hill of beans what kind of support was needed by small businesses. However, they have sold licenses to about 13000 business, and apparently, about 6000 are up and running. These business are going to generate recurring revenue, but it doesn't kick in until they have been up for a year. We should start seeing the beginning of these revs toward the middle of the year.
What got me interested was the deals they signed with AOL and Lycos. AOL is using transact4 for their classifieds and personals. I would expect AOL to give them a hard look for their ecommerce mall. Lycos gave them a pretty good deal and is going to use them to for their packaged ecommerce solution used in their mall that they are use to set companies up on. Yahoo is also apparently using a company who purchased Transact 4 to do their order processing from their ecommerce site.
That's what got my interest. I know the financials don't look great. I think they are trying to get some inertia by giving really good terms.
bp |
