Unica rides out downturn on SaaS offerings

Marketing software firm Unica has looked to stave off economic concerns by expanding its web analytics offering into the software as a service market - and its latest results suggest this strategy has been a success. CEO Yuchun Lee discusses Unica's on-demand plans, web analytics and its position in the marketing software market.

By Stuart Lauchlan, news and analysis editor

Marketing software firm Unica has been riding out the credit crunch, expanding into the on-demand arena with its web analytics offering.

And it's a strategy that appears to paying off with total revenue for the recently closed third quarter came in at $33.3 million, up 46% on a year over year basis. Licence revenue came in at $12.1 million, up 71% year on year. Some 85% of enterprise license revenue came from new customers, 15% came from existing customers while 66% of total revenue came from the Americas with the remaining 34% from international.

“During the third quarter, we continue to see blue chip customers across a wide range of vertical markets selecting Unica as a strategic vendor for enterprise marketing management (EMM),” said CEO Yuchun Lee. “We believe that Unica is benefiting from our industry leading product breadth and depth as customers increasingly evaluate EMM vendors, based on their ability to deliver a suite of solutions to address their wide range of marketing challenges."

"Our increased momentum is coming at the right time as market demand for web analytic solutions remains strong."


Yuchun Lee, CEO, Unica

The firm is also seeing the uptake of the software as a service (SaaS) revolution. “Unica on-demand continued to gain momentum,” said Lee. “There's clear evidence that we are gaining traction in the web analytic market in particular, which has led to better than expected performance for our overall Unica on-demand business for the year. To date Unica's on-demand revenue is primarily related to our web analytics and MRM solutions.

“During the third quarter Unica signed up over 50 new customers including companies as National Instrument, Check Free Services, Fairpoint Communication, John Riley and Sons, Lexus, Nexus and Virgin Mobile USA among others. On a year to date basis we have signed now over 150 new Unica on-demand customers and we are ahead of our internal plan on the booking perspective.

“We're still in the early stage of building out Unica on-demand and our plan is to build on our success and to deliver a broad and attractive marketing on-demand suite over the course of the next several quarters. In doing so, we'll leverage Unica's existing domain expertise to integrate key EMM capabilities in the on-demand suite that will be tailored for organisations in mid-sized business.”

Recession-proof?

There have been early indicators of success. “We're particularly pleased with our progress in the web analytics market. During the third quarter a very respected industry analyst firm, Jupiter Research, issued their web analytic buyers guide in which Unica was rated one of the definitive leaders. We believe our increased momentum is coming at the right time as market demand for web analytic solutions remains strong. We believe the market is particularly looking for alternative, next generation, cross channel analytic solutions to which our solution is highly differentiated in the market.”

“There continues to be a high level of interest in enterprise marketing management technology. It is important for solutions that have a clear value proposition during a challenging economic time. As a purchaser we need to consider the must have rather than nice to have. Last quarter, we noted that we saw a greater level of cautiousness among domestic buyers in our last call as a result of the difficult economic environment. Our third quarter results were better than we expected however, we saw continued cautiousness in the domestic market and there are early signs that international buyers were also starting to become more cautious.”

But Lee sees Unica's offering as relatively recession-proof. “We've believe the core drivers through the EMM market remain solid from both the short- and long-term perspective,” he said. “Marketers need solutions that help them better understand their customers, coordinate their effort across different parts of their operations including brand marketing, direct marketing and the growing importance of internet marketing, and they need to execute more coordinated campaigns across multiple inbound and outbound channels.

“A key reason we feel very good about our market position is the fact that Unica is the only company in the entire marketing technology space that is ranked as the market leader as top analysts in their management, in MRM, in web analytic, and in the overall EMM market. So the strength of our solutions also continue to be validated as blue chip companies engage in detailed vendor evaluation, ultimately select Unica as their strategic EMM solution provider.”

Recent new customers for the firm include eIntercontinental Hotel Group, Hilton Hotels, Ameriprise Financial, UPC broadband, the Christian Broadcasting Network, SMS Bank, Express Script and Sears. But existing customers are also buying more. “On a year to date basis, 35% of our perpetual license revenue comes from existing customers,” noted Lee. “We closed follow-on businesses with key customers such as ComCast, Merchant Bank, KBC Bank and many others.”

A good example of a Unica customer is Reed Business which has deployed Unica’s Affinium Campaign software to improve its insight into existing and prospective customers’ needs and behaviour. This is intended to enable the firm to service its customers better and execute targeted marketing campaigns faster, integrating customer data and customer interaction through offline and online channels, including internet, magazines, contact centre and digital newsletters.

Marketing campaigns through direct mail, email and internet play an important role for the company’s 100 plus marketers, whose main objective is to increase sales and brand awareness. Unica’s solution increases the flexibility at Reed; campaigns can be executed faster and can be optimised in terms of customer needs. Thanks to Unica, marketers now have more flexibility and can make changes dynamically, making them less dependant on an IT department Selecting customer groups is made easier, using rules Reed marketeers can establish themselves. This increases flexibility.

“We now have multiple options per individual customer for selecting the right channel, timing and offer. We now can use more channels to realise cross and up sell. Technology is no longer the bottleneck,” said Hans de Boer, head of the Customer Care Centre at Reed Business. “Our marketers can now focus on the creative development of marketing campaigns and adjust them based on the results.”