ERP vendor Lawson Software Inc has issued a profit warning blaming uncertainties related to the Oracle court case and the prospects of industry consolidation for customers’ reluctance to spend.
It expects to report revenue for its first quarter to August 31 to be down 6.8% at $82m and earnings per share, before exceptional items, of breakeven to $0.01. Analysts polled by Reuters were looking for revenue of $92.3m and earnings per share of $0.03 cents.
Lawson CEO Jay Coughlan said that in common with other enterprise software companies, it has experienced lower business activity, longer customer decision cycles, and contract deferrals. He said customers are also giving priority in IT spending to Sarbanes-Oxley compliance.
Documents released during the Oracle trial showed that Lawson was on the company’s original target list of takeover prospects. In evidence to the court, Coughlan said talks were held with Oracle in 2002 about a possible takeover. He said the company was no longer interested in such a merger
While PeopleSoft has been worst affected by Oracle’s unwelcome takeover attempt, Coughlan’s comments suggest that takeover speculation in the sector has made customers reluctant to commit themselves to software at the core of an enterprise’s IT operations when there is no guarantee that the vendor will remain independent.