Software giant Compuware has denied that its growth in market share and revenues, which bucks the market trend, is a direct result of its customers' year 2000 panic.
Revenues for the first quarter ended 30 June rose 50.8% from $224.5 million (#136.9 million) to $338.6 million (#206.5 million) and net income grew 108.1% from $28.3 million ($17.3 million) to $58.8 million (#35.9 million) from the same quarter last year. The most significant revenue increases were in software licensing fees and professional services fees.
Asked how much of Compuware's 50% increase could be attributed to year 2000 sales, UK managing director, Rakesh Nagpaul, stated: "Not a lot really, all year 2000 has done is to highlight the need for testing." He admitted that Compuware had made it clear to customers that its software tools could be used to address the millennium problem and that they are obviously being used for that purpose by some customers. Far from profiting from the problem, he said, customers' preoccupation with the bug has caused a slow-down in some areas of Compuware's business: "Year 2000 is slowing our growth because people have stopped developing."
Profits from year 2000 only accounted for 5% to 10% of revenue growth, he claimed, and no more than 15% of the services personnel were directly engaged in millennium projects.
In contrast, according to a report from IDC last week, the vendor had leapt to the top of the big earners list for automated software-quality (ASQ) tools vendors, accounting for 12.7% of the annual $645 million (#389 million) ASQ market, an improvement of six points on last year. In the report, IDC said: "(Among other market drivers) testing related to the year 2000 compliance efforts began to have an impact on the market in late 1997 and will continue over the next several years ... Much of (the vendor's) strength was in the mainframe arena in which Compuware's customer base and the year 2000 problem are centred."
Some of the growth can also be attributed to the acquisition of NuMega, completed 15 December 1997.
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