Software developer poised for growth
While the weakened economy has rattled many companies, Swedish-based IFS AB,an enterprise application vendor whose North American headquarters are in Schaumburg, recently unveiled a five-year growth projection that not only envisions long-term success but profitability in America's recession-fearing climate.
The company statesit can double product revenue by 2012 to $360 million, from $180 million last year.
"I'm still bullish on the market on IFS," said Cindy Jaudon, the firm's American-division CEO and a native of Plano. "We believe it's going to increase certain parts of our market."
IFS's software helps companies maintain better inventory control and supply chain management. It also helps document complex industrial processes, such as taking apart and putting back together an airplane engine. The global software company has about 50 worldwide offices and focuses on seven industries: manufacturing and industrial processes, high-tech and medical devices, aviation, rail and defense.
The company employs 43 in Schaumburg who work in corporate management or in small teams of software programmers that attune applications to suit customers' needs.
Most of the software development for the firm takes place in Sweden and Sri Lanka.
A few years back, the company's prospects of success looked glum, said Technology Evaluation Centers analyst Pedrag Jakovljevic.
"They were investing a lot in research and development and trying to expand beyond their means," Jakovljevic said. "They had lots of red ink in the pot, but that hasn't been the case lately."
Since Jaudon and CEO Alastair Sorbie took office in 2005, the company has steadily been increasing its margins, though those remain modest, and posted three consecutive years of growth. In 2007, IFS's net revenue leaped to $112 million, from $101 million in 2006.
Jaudon said a recent contract with the U.S. Air Force, slated to roll out by 2012, is one example of IFS's recent North American growth. "The U.S. Air Force is using IFS applications to replace all their maintenance applications through all their maintenance depots throughout the U.S.," she said.
Despite recent growth, some analysts say the company will struggle to meet its 2012 projection.
"They have a history of quite ambitious targets to the stock market and have not been able to fulfill them," said analyst Mikael Holm of Swedbank, a Nordic banking group.
Jaudon said the firm, which competes with Microsoft Corp., Oracle Corp. and SAP AP, and is traded on the Stockholm Stock Exchange, expects its maintenance software and its manufacturing processes software to sell increasingly well this year. She said companies will look to get "more return on the assets" they have or make moderate upgrades to their business instead of purchasing new, more expensive software offerings from IFS's competitors.
David W. Dunn, CEO of Rampart Global, an engineering services company, said he chose IFS because its software package was not only better but less expensive. "They were able to tailor a package to our small business needs," he said. "It looked, quite frankly, like a large-company system."