This continues our interview with the new CEO of Unit4. Part 1 ran yesterday.
The Unit4 brand is much stronger in Europe than in North America. What's your vision for changing that?
In fairness, North America is already around 15% of our revenue. In 2015, we grew licenses by 20% and doubled our bookings in the region. Doubling bookings is not something too many of our competitors can claim to have done in the region.
We certainly have appetite for more growth. However, we also have to factor that it is expensive to grow brand recognition in North America. Many European companies have burned their fingers attempting North American expansion because it is a rather complex market. It's probably more homogeneous than Europe but still there are huge differences between east coast, west coast, and whatever, the states in between and so on and so forth.
Yes, we are reminded of that every four years as we go through the US Presidential primaries how diverse this market is
We are being selective. North America higher education, public sector - especially in Canada-,Professional Services are very promising. I would love to be in a position to do massive airport advertising, but we're still working on getting the cash for something like that.
How do you see your competitive landscape changing in the next couple of years?
I would say we have three different types of competitors. We have, of course, to compete against the big ERP players, like Oracle, SAP, Microsoft and to a lesser degree, Infor, Epicor and Sage. Next we have a set of local players that we see quite often. In the Nordics, it's predominately Visma. In the Benelux, players like Afas. Then last we have the vertical players, so in PSA we face Deltek. In higher education we see Ellucian, Jenzabar, Oracle, Workday and Tribal Group. In not for profit we're meeting Abila and even more verticalized special players. I think that there is no significant change to be expected there, at least for in the next two years.
What we definitely will be seeing is cloud players becoming more aggressive, which will also further drive the vertical offering. Take NetSuite in what they do in not for profit, take Workday with what they do in higher education. Plus, I think there is a growing number of smaller startup firms that offer very specific best of breed functionality.
At the end of the day I don't really think that this is fundamentally changing the competitive dynamics. What's changing is the business model. We are more moving into a true as-a-service offering, not only deploying technology as a service but deploying business processes as a service. I could imagine that in a few years from now, we could be selling student success, selling better ranking for universities, selling less project risk for service organizations rather than just selling a set of functionality.
Let's talk about your product side. What excites you as you walk around your R&D lab?
I would say there are many things that excite me. If I had to focus I would focus on two things. Number one is the deep vertical expertise that we have and the conviction that we get again and again that our applications have been built from scratch for service organizations. We've launched what we call advisory councils. We have them for industries and also horizontal capabilities like corporate performance management. In each advisory council we've selected between 6 and 12 customers from Europe and the same number from North America. We spent a day with them talking about what changes on their businesses and how can we support them better with technology. The expertise that we bring to the table combined with the expertise and the collaboration that we have with our customers, this is something that I'm truly excited about.
The second thing is our self-driving ERP concept and related plans for a digital assistant. Through our partnerships, predominately with Microsoft, we clearly see that there are technology components we can use and add our own algorithms and expertise to truly build applications that are different and provide a unique consumer-like experience. We are building applications that really support people to be smarter, to be more efficient, and ultimately to be more productive.
I strongly believe this self driving concept is something that is highly differentiating. This is something that can't be replicated easily because it requires more than just technological expertise. It requires the understanding of the industry, the understanding of human behavior in business processes, and emerging technology. Combining these three elements into something that is completely new and completely different is hopefully a big differentiator for us.