US-based Web CMS vendor Ektron recently announced that August 2009 was a record-breaking month for them. It is quite unusual for CMS vendors to release news about monthly performance, but Ektron did post a 96% increase in sales. Ektron must have felt that this story was too good to keep to themselves. Let us examine it bit closer - from the perspective of the practitioner.
To understand the numbers better, I had a brief conversation earlier this week with Ektron CEO Bill Rogers. Ektron has grown to having 210 employees with several offices outside the US, including Canada, the UK and Australia. About 75% of revenue is still US-based and outside the US, the UK office leads in terms of revenue. According to Rogers, the international offices are growing rapidly and the UK office has got over 10 employees.
To provide some perspective, we estimate Ektron to be roughly twice the size of Sitecore, which had revenues of about €12 million in their latest fiscal year. Ektron did make it to our Web CMS Shortlist 2009 and has been growing rapidly for quite a while. However, this is not unique: many vendors have had happy days thus far in 2009, including Day Software, IBM and Sitecore.
According to Rogers, Ektron has a few "technology game changers" which help Ektron win deals, most notably their PageBuilder for rich text editing and eSync for site synchronization. If you consider that enterprise licenses start at around €50k, a few additional deals could literally make a huge amount of difference and create a bumper month. It could also simply be that August 2008 was a weak month, thus making it easier to impress in August 2009.
As a privately-held vendor, Ektron has opted for increased transparency, but is still very secretive about their financial results. Unlike other vendors they don't release numbers about revenue or profit. They did put out a press release about Q1 growth earlier this year claimed 26% revenue growth. I’ve followed Ektron since the late 90’s, when their main product was as a rich text editor called eWebEditPro. Today the CMS represents the vast majority of the company revenue, with the editor counting for less than 5 % of revenue.
To me, it seems like Ektron is adopting a defensive one-way approach to transparency. They decide and control what gets shared with the general public. This might be comforting for investors or the less critical buyers. In my view transparency is not about control, but a process where stakeholders, e.g. customers, are treated with openness and insights.
At my last Ektron briefing in May, they expected the release of version 8, the next major version in August. We are now in late September and version 8 is still not out.
What should you really look for in financial numbers? I would say that profit is more interesting than growth. Also, does it really matter much whether August was good or bad when the next major release has been delayed?