Prospective customers of Intercede are demanding rental terms rather than perpetual licences. Add that factor to the challenging global economy, which is making sales difficult, and it all adds up to a revenue warning. With £6.3m on the order book and six weeks to go to the end of the year, the identify and credential management software provider is not confident that it will add to the existing total so is warning that revenue is expected to be similar to last year.
Despite being in the cyber security sweet spot Intercede’s performance has wavered, impacted by reduced public sector spending and tough conditions particularly in Europe. Last year it delivered 11% revenue growth (see Intercede plans for growth) but the first half of the current year was little more than flat on the previous period (see Intercede: rest of world’ the saving grace).
It is doing the right things – over the past six months it has extended coverage into the smart phone market and is set to take part a number of high volume managed service projects – but sales are still difficult to come by and taking longer to close in this very competitive market.
The comment that prospects are demanding rental terms was particularly interesting. With customers able to force the pace among suppliers, it shows just how deeply the disruptive force of SaaS/subscriptions model has penetrated the software market. Resistance is futile.