Baan's chief executive has quit after only six months and the company is to make nearly 200 job cuts as it forecasts a fourth quarter loss of up to $250 million.
To add to this New Year misery, the company's shares nosedived more than 30 per cent today on the Amsterdam stock exchange to 10.15 euros in response to the news from Europe's number two software vendor.
In a statement, departing CEO Mary Coleman said she would pursue technology opportunities closer to home in Silicon Valley.
Pierre Everaert, the current chairman of Baan's supervisory board, will become interim CEO until a permanent replacement can be found.
The ERP systems vendor said it would close 14 offices and reduce headcount by about four per cent, or about 188 people.
At the same time, Baan also announced that despite a quarter over quarter increase in revenue of 50 per cent for the three months to 31 December, it expects to post a fourth quarter $240 to $250 million loss - largely as a result of a restructuring charge of $200 million. This follows five consecutive quarterly losses. It is likely to report final figures for its fourth quarter later this month.
Martin Brampton, analyst with Bloor Research, said, "They can make it out as a one-off loss, but taking all the grief with a restructuring charge looks dodgy if it is repeated." Baan took a one-time restructuring cost at the same time last year.
The company plans to focus its operations on the business to business ecommerce market. Katrina Roche, chief marketing officer of Baan, said, "By leveraging our dominant position and deep domain expertise in manufacturing, we believe Baan can achieve a leadership position in business to business ecommerce by focusing on open integration ecommerce solutions."
Brampton believes that Baan will "rely on partners such as IBM and systems integrators to do their selling and bring in the business."
He added: "ERP has passed its peak of interest. Disillusionment has set in. Attention has shifted to nimbler areas such as ecommerce and CRM. Baan is trying to get into the field but it is trailing."Financial analysts in the US tried to play down the impact of Coleman's departure but in Amsterdam comment was hostile, with brokers Ing Baring and ABN Ambro marking down their recommendations sharply. Words like 'takeover', 'sinking ship' and 'incapable' peppered comments reported elsewhere.
It has been clear that Baan's core enterprise products have not been selling and the last couple of quarters have been buoyed by Coleman doing a selling job on the back of her experience at CRM vendor Aurum - a Baan acquisition. As noted in past vnunet.com stories, Baan's financial position is desperately weak with little cash left to cover operating expenses.
Industry analyst Jim Holincheck of Giga likened the situation to others seen recently when he said, "It will put a big drain on that credit line they have. I don't know if they will be able to get out of the SSA lingering death spiral at this point."
Frankfurt based Bank Julius Baer estimates that SAP could see a 1999 fall in earnings as high as 41 per cent.
Cotton seedling freezes to death as Chang'e-4 shuts down for the Moon's 14-day lunar night
Fortnite easily out-earns PUBG, Assassin's Creed Odyssey and Red Dead Redemption 2 in 2018
Meteor showers as a service will be visible for about 100 kilometres in all directions
Saturn's rings only formed in the past 100 million years, suggests analysis of Cassini space probe data
New findings contradict conventional belief that Saturn's rings were formed along with the planet about 4.5 billion years ago