Event Summary
Clarus Corporation (NASDAQ: CLRS) used to be a peach of an ERP (Enterprise Resource Planning) vendor with a product line containing financial and human resources applications. It had revenues of $17 million in 1998, up from $12.3 million in 1997. However, the company threw off its old friends and lifestyle by selling its ERP business to Geac Computer Systems, Inc. and Geac Canada Limited for $14.5 million in 1999.
Clarus has recast itself as an E-procurement player and is now seeking approximately $120 million in a secondary stock offering.
Market Impact
The stock market is certainly happy with Clarus, at least for now. Its stock had reached a high of $8.63 in 4Q 1998, but since the sale of its ERP business and its transformation to an Internet company (i.e., one that has no plans to be profitable in the foreseeable future) the stock price jumped to $88. Success in the E-procurement market is quite a different thing.
Clarus' start is neither impressive nor discouraging, with 28 licensed customers, of which eight customers were making purchases with the product, by January 1,2000. Initial customers include First Data Corporation, MasterCard International, MetLife, Parsons Brinckerhoff, Perot Systems, and The Container Store.
Further, Clarus' product is available on a subscription fee basis through application service providers. In addition to supporting individual companies, Clarus also offers its product as a base for markets built by third parties. Clarus does not intend to operate and own digital marketplaces.
Clarus is aiming itself at the mid-market, where they will be competing with such vendors as Concur, Remedy, and Peregrine. This market is still largely untouched, so Clarus could succeed financially without significantly impinging on its competitors. Where a large success on Clarus' part would be significant is in a market redefinition. Clarus' approach eschews the by-now-common model of a centralized market through which all transactions pass. Instead, Clarus offers a model that relies on suppliers to maintain web-based catalogs, indexing services, and other content aggregation tools. It provides a direct connection between buyer and supplier without requiring transactions to be executed through a centralized trading portal.
Their trading network, SupplierUniverse, performs the value-added trading services delivered by centralized trading portals, including content management and auction capabilities, while eliminating the transaction fees of those portals. The company claims that this avoids scalability limitations, which they believe are inherent in the centralized trading portal approach. If Clarus can succeed, either by wooing buyers and suppliers with their model or by demonstrating significant operational advantages to their model, there is always the possibility that they could be seen as an industry leader and force others to play catch up.
SOURCE:
http://www.technologyevaluation.com/research/articles/with-new-clothes-and-hairdo-clarus-asks-for-pin-money-15378/
Clarus Corporation (NASDAQ: CLRS) used to be a peach of an ERP (Enterprise Resource Planning) vendor with a product line containing financial and human resources applications. It had revenues of $17 million in 1998, up from $12.3 million in 1997. However, the company threw off its old friends and lifestyle by selling its ERP business to Geac Computer Systems, Inc. and Geac Canada Limited for $14.5 million in 1999.
Clarus has recast itself as an E-procurement player and is now seeking approximately $120 million in a secondary stock offering.
Market Impact
The stock market is certainly happy with Clarus, at least for now. Its stock had reached a high of $8.63 in 4Q 1998, but since the sale of its ERP business and its transformation to an Internet company (i.e., one that has no plans to be profitable in the foreseeable future) the stock price jumped to $88. Success in the E-procurement market is quite a different thing.
Clarus' start is neither impressive nor discouraging, with 28 licensed customers, of which eight customers were making purchases with the product, by January 1,2000. Initial customers include First Data Corporation, MasterCard International, MetLife, Parsons Brinckerhoff, Perot Systems, and The Container Store.
Further, Clarus' product is available on a subscription fee basis through application service providers. In addition to supporting individual companies, Clarus also offers its product as a base for markets built by third parties. Clarus does not intend to operate and own digital marketplaces.
Clarus is aiming itself at the mid-market, where they will be competing with such vendors as Concur, Remedy, and Peregrine. This market is still largely untouched, so Clarus could succeed financially without significantly impinging on its competitors. Where a large success on Clarus' part would be significant is in a market redefinition. Clarus' approach eschews the by-now-common model of a centralized market through which all transactions pass. Instead, Clarus offers a model that relies on suppliers to maintain web-based catalogs, indexing services, and other content aggregation tools. It provides a direct connection between buyer and supplier without requiring transactions to be executed through a centralized trading portal.
Their trading network, SupplierUniverse, performs the value-added trading services delivered by centralized trading portals, including content management and auction capabilities, while eliminating the transaction fees of those portals. The company claims that this avoids scalability limitations, which they believe are inherent in the centralized trading portal approach. If Clarus can succeed, either by wooing buyers and suppliers with their model or by demonstrating significant operational advantages to their model, there is always the possibility that they could be seen as an industry leader and force others to play catch up.
SOURCE:
http://www.technologyevaluation.com/research/articles/with-new-clothes-and-hairdo-clarus-asks-for-pin-money-15378/
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