It somehow slipped my radar that WCM-vendor Sitecore released their annual report back in November. Once again they managed to post record numbers with increasing revenue, profit and capital base. Revenue is now at DKK 131 million (up from DKK 79 million) with net earnings at DKK 38 million (up from DKK 18 million). The reported headcount has also gone up to more than 125 employees worldwide from 92 employees. For the whole Sitecore Group, revenue amounted to DKK 217 million, and total headcount was 200.

With growth in all markets and recent office openings in Germany and Japan, Sitecore has come along way from their start in Denmark. Apart from the purely geographical spread, it seems like Sitecore now wants to spread its wings further and grow their implementation revenue and extend their success beyond the web content management marketplace.

I spoke to Sitecore Chief Operating Officer Kim Elsass, about the annual report and recent developments. According to Kim, North America has become the largest market for Sitecore, while the traditional Danish home market is continuing to grow.

Those online professionals really interested in the numbers, will notice that in the UK and US, Sitecore is operating using partially owned subsidiaries. These send part of their profit back to Copenhagen and somewhat complicate the picture when reading the annual report. According to Kim, Sitecore is working on simplifying the ownership structure. From a buyer's perspective, we don't see this having any significant impact on day-to-day business.

Kim also confirmed that based on requests from enterprise buyers who wants Sitecore to assume more implementation responsibility, Sitecore is planning to offer more implementation services. Sitecore is still planning to keep their 700+ partners happy by not offering to do implementations without a partner, but by playing a larger role in the implementation going forward, e.g. by offering architectural reviews or performance tuning  Most competing WCM vendors, e.g. Ektron, already have strong professional service divisions.

In the past we've seen examples of substantial discounts offered on Sitecore licenses, but evidently this has not hurt Sitecore financially. Perhaps to the contrary, Sitecore is using attractive license offers to keep their eco-system of agencies and implementation partners busy and happy.

Finally, the annual report and the conversation with Kim, confirmed that Sitecore is taking a quite broad view of web content management to also include online marketing, e-mail campaigns and intranet portals. More product launches are planned for the coming months.

Will Sitecore be able to continue the success and beat their own numbers once again? Feel free to share your thoughts below.

Earlier this month Danish CMS vendor Sitecore released their annual report showing record profits and revenue. Compared to last year (see our comment), revenue went up from DKK 56 million to DKK 79 million and profit increased  from DKK 20 million to 25 million. Sitecore has also grown from 120 to 160 employees worldwide.

For some reason, the Sitecore press release is currently only available in Danish and the annual report is nowhere to be found on the English version of the Sitecore site. Apart from the numbers, Sitecore uses the press release to make some other statements:

1. Sitecore is among the global CMS top 3
2. Analyst firm Gartner has crowned Sitecore as the most visionary vendor in the world
3. CMS consolidation will continue in 2010

I'll simply say that I suspect the lack of translation is not to hide the annual report from competitors, but rather to avoid global ridicule with these hard-to-believe claims.

I have taken some time to study the annual report and the numbers contained in order to explore what is in store for Sitecore customers. Here my comments:

• License sales is almost DKK 76 million out of the DKK 79 million revenue, with the majority of the remaining revenue being training courses.
• Sitecore is far from the only vendor doing well in the current financial climate. US direct competitor Ektron is also doing very well and so are Java-based alternatives Day Software and FatWire
• According to the annual report, Sitecore has used the past year to set up shop in The Netherlands and in Sweden. With strong local competition (Tridion and EPiServer respectively), the new office in Sweden lost DKK 500.000 while the Dutch subsidiary was profitable
• In the coming fiscal year, Sitecore is planning to continue the quest for world domination and establish themselves in Japan

Sitecore have also just announced their very first live customer on their much promoted Online Marketing Suite. To my surprise this was a government customer - National Consumer Agency of Denmark - and I can only imagine how relieved Sitecore is to finally have a real OMS reference. OMS was a topic in a recent J. Boye group meeting and for our take on OMS, see Peter Sejersens critical analysis: New Sitecore version – why bother?

Throughout 2009 Sitecore have also worked hard on addressing shortcomings when it comes to cross-browser support. According to Sitecore, the desktop interface, which has previously only worked in IE, will soon be released in an updated version with support for the Chrome and Firefox browsers.

Finally, I suspect Sitecore will have  a more difficult year ahead in 2010. The Danish home market is seeing increasing Umbraco adoption, an open-source .NET alternative, and I suspect many loyal Sitecore partners will be tempted to offer Umbraco and get a bigger chunk of the budget for implementation. Outside Denmark every major competitor already has OMS-like offerings, so unless Sitecore can come up with a real differentiator, I would recommend that buyers look at the price. At the moment Sitecore is substantially more expensive than competing vendors such as Ektron, EPiServer and Kentico and I'm wondering if this will continue throughout 2010?