Annual Report: FatWire reports profitable year and revenue increase

Last week the Long Island-based CMS vendor FatWire distributed a press release reporting its fourth consecutive year of increasing year-on-year profitability and a 40 % increase in 2008 revenue. Revenue now stands at $44 million, divided between roughly 40 % license revenue, 30 % services revenue and 30 % maintenance revenue.

With the current financial crisis, it is impressive that FatWire is growing its profits. With few exceptions competing vendors are either shrinking (e.g. Vignette) or getting acquired (e.g. Interwoven). A part of the reason may be the quite unusual revenue mix for a US vendor in this space; only 40% of the revenue is from North America, 50% is coming from Europe and the remaining 10% from rest of world.

FatWire is differentiating itself from the many other vendors in the still crowded CMS marketplace by positioning itself as a Web Experience Management vendor. I always find it interesting when small vendors attempt to define new terms and new markets. I have still not met a buyer with a Web Experience Management budget, but evidently the strategy is working as new customers are signing up.

From talking to customers, FatWire often likes to work via partners; some more experienced than others. With services bringing in $13 million revenue, FatWire is evidently also working directly with quite a few customers. Perhaps Web Experience Management projects require special skills? According to FatWire they are working on rolling out a new global partner certification scheme.

A closer look at the press release and a discussion earlier today with FatWire CEO Yogesh Gupta and other recent briefings with FatWire resulted in the following findings:

• Revenue is up in all geographies, including the US
• Average licence deal is now at $200,000
• The 200+ employees are spread out in 8 global sales offices, 6 different support centers and 4 engineering teams in New York, Kiev, Vienna and New Delhi.

Critical buyers should note that unlike other successful privately-held vendors, e.g. Sitecore, FatWire has not released an audited annual report, but simply decided to share a few numbers via a press release. The company has opened up compared to previous years by publicly releasing their revenue figure and if you are interested in further details, I recommend that you talk directly to FatWire, who might be willing to share additional, and perhaps even audited numbers.

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