SoftwareOne starts year strong with growth in Q1 2023
The Swiss group posted a rise in revenues but saw some negative effects from Microsoft’s new NCE model
SoftwareOne has reported a solid start to 2023 with its first quarter financial results.
At the group level, revenue increased 8.7 per cent to CHF 239.4m (£213.3m) in Q1 driven by growth across main business lines.
"I am tremendously excited by the opportunity to lead SoftwareOne into the future. Having joined in early May, I look forward to spending the next few weeks getting to know the global SoftwareOne team," said SoftwareOne CEO, Brian Duffy.
"Together, we will extend our ability to help our clients reap the full technological and economic benefits of moving to the cloud, while driving profitable growth and value creation for SoftwareOne's shareholders."
As well as a new CEO, SoftwareOne underwent a rebrand at the start of 2023 as it looked to try and reposition itself as having evolved to new market challenges and opportunities.
New Microsoft NCE model impacts revenues
The partner's software & cloud marketplace delivered revenue growth of 6.4 per cent to CHF 125.6m (£111m) in Q1, up from CHF 121.9m (£108.6m) during the prior year period, driven by a 30 per cent revenue rise in the ISV portfolio.
Gross billings in the Microsoft business came to $4.2bn, up 13 per cent year on year, driven by solid momentum across customer segments.
Meanwhile, SoftwareOne said Microsoft revenue was negatively impacted by the shift from legacy CSP to the New Commerce Experience (NCE) model.
After a transition period with lowered incentives on the legacy CSP platform, the NCE model comes with higher pricing, a more favourable incentive structure and longer-term subscriptions, it said.
Over in the group's In software & cloud services arm, revenue gained 11.4 per cent year on year to bring in CHF 113.8m (£101.4m) owing to continued 20 per cent growth in cloud services, application services and SAP services, partially offset by a decline in legacy services.
SoftwareOne rises in Europe but deflates in North America
By region, EMEA delivered a solid quarter, with revenue up 8.9 per cent year on year to CHF 149.4m (£133.1m), driven primarily by strong momentum in large enterprises in the DACH countries.
APAC grew 23.1 per cent to CHF 31.3m, due to strong results in markets such as China, Singapore and Malaysia.
Meanwhile, NORAM saw a revenue decline of 3.2 per cent to CHF 32.6m (£29,m), on the back of more cautious spending by clients and changes to Microsoft's cloud service provider platform.
SoftwareOne to acquire Beniva Consulting
SoftwareOne said it has agreed to acquire Beniva Consulting, an Elite ServiceNow partner headquartered in Calgary, Canada.
Founded in 2016, the company has a headcount of 75 and is specialised in providing end-to-end professional services to clients seeking to leverage the platform of ServiceNow, a provider of workflow solutions and preferred vendor of enterprises moving to the cloud.
With this acquisition, SoftwareOne expands its ITAM service line from a $2bn addressable market to the more than $7bn IT service management (ITSM) market, within the broader IT operations management (ITOM) space.
The transaction is expected to close in Q2 2023.