Indus International Inc.
Indus International Inc.
3301 Windy Ridge Parkway S.E.
Telephone: (770) 952-8444
Toll Free: (800) 868-0497
Fax: (770) 955-2977
Web site: http://www.indus.com
Sales: $146.4 million (2004)
Stock Exchanges: NASDAQ
Ticker Symbol: IINT
NAIC: 511210 Software Publishers; 518210 Data Processing, Hosting, and Related Services; 54151 Computer Systems Design and Related Services; 541511 Custom Computer Programming Services; 541512 Computer Systems Design Services; 541519 Other Computer Related Services; 611420 Computer Training
Based in Atlanta, Georgia, Indus International Inc. is a leading provider of enterprise asset management (EAM) and service delivery management (SDM) products to some 300,000 customers in 40 countries. The company offers software and services in the areas of asset management, workforce management, customer relationship management, supply chain management, product lifecycle management, business process management, and maintenance/calibration management. It also provides custom training, return-on-investment analysis, financial and business analytics, complex billing, hosting, professional consulting, extended enterprise resource planning, post implementation optimization, and staff augmentation services. According to Indus, its offerings "enable companies to optimize the management of their customers, workforce, spare parts inventory, tools, and documentation—empowering organizations to maximize efficiencies in their equipment, facilities, workforce, and field service operations." The company's customer base includes large and small organizations in 20 major industries including chemicals, communications, complex industrial equipment, defense/aerospace, discrete manufacturing, energy delivery, facilities, forest products, healthcare, higher education, managed service provision, metals and mining, oil and gas, power generation, process manufacturing, the public sector, telecommunications, transportation, utilities, and water/wastewater. As of 2005, Indus had 56 strategic partnerships in place across the globe. More than 85 percent of the world's utility and energy firms used the company's products to manage their assets. Additionally, Indus was an industry leader in research and development, devoting some 30 percent of its revenues to this area.
Although Indus International was officially formed in 1997, its roots stretch back about 20 years earlier. One of the company's predecessors, The System Works International Inc. (TSW), was founded in 1976. TSW developed and distributed an asset management software suite called EMPAC. In its third year of operation, TSW was chosen by one of the world's most efficient aluminum smelting facilities to implement a computerized maintenance management system. According to Indus, this system was the first of its kind.
Indus International's other predecessor, the Indus Group Inc., was established in 1988. With operations based at 60 Spear Street in San Francisco, Indus Group operated as a sole proprietorship until it was incorporated in 1990. The company's first product was an asset management software suite called PassPort that helped companies in so-called process industries—namely the petrochemical and electric utility sectors—effectively comply with regulatory issues and maximize performance in a variety of areas.
By August 1993 PassPort's capabilities included work management, document management, purchasing, fugitive emissions management, inventory control, engineering change control, personnel qualifications data, and equipment tag-out. PassPort's software modules ranged in price from $50,000 to as much as $350,000, and were available across IBM's CICS family of products.
In October 1993, the Indus Group ranked third (first in California) on Inc. 's list of America's 500 fastest growing privately held companies. The average company on Inc. 's 500 list experienced annual growth of 1,761 percent that year, while Indus grew at a rate of 19,499 percent. This phenomenal growth translated into strong performance. From the time it incorporated in 1990 through 1994, Indus Group was a profitable company. By 1995 its sales totaled $53 million, up from $30.5 million the previous year and $27.5 million in 1993.
In 1994 Indus formed a consulting arm called the Reengineering Services Group that operated from its San Francisco headquarters, and from offices in Pittsburgh; Portland, Oregon; Stamford, Connecticut; Monterey, Mexico; and London. At the time, many of Indus Group's petrochemical and electric utility clients were reengineering their business processes and utilizing new technology to deal with a more complicated operating environment. Indus Group sought to provide its customers with meaningful guidance in translating conceptual strategies into new business practices.
In a January 27, 1994, Business Wire release, Indus Group President and CEO Robert Felton said: "We have learned through on-site experience, the 'best practices' of our customers and our packaged software products contain those solutions which serve as the catalyst for change. The expertise, tools and methodologies that made us an industry leader in the enterprise software solutions business will be made available to our reengineering customers. . . . We distinguish ourselves from the consulting firms who write endless recommendations because acting as our customer's mechanic, we are the hands-on guys who get things done."
In 1995 Indus recorded its first net loss due to a one-time compensation charge. By this time the company had two product lines: PassPort and Abacus, and its clients included the likes of Pacific Gas & Electric Company and Chevron USA. Of its 320 employees, about one-third were involved in research and development initiatives. That year, a strategic alliance was formed with Computer Sciences Corporation to provide the utility industry with information technology services on an outsourced basis. In addition, the company employed a direct sales force that covered the United States, the United Kingdom, and the Middle East. Less than a decade after it was established, The Indus Group went public with an initial public offering on February 29, 1996.
A Powerhouse Is Born in the Late 1990s
On August 25, 1997, Indus Group merged with TSW International to form Indus International Inc., the largest enterprise asset management (EAM) software company in the world. By the time of the merger, TSW had developed into a leader in the asset care software market. Its Enterprise MPAC software included modules for asset maintenance, procurement, inventory, electronic document management, workflow, and workforce management.
Based in Atlanta, TSW had service centers in Australia, France, and the United Kingdom. It served more than 900 customer sites in 48 countries. These customers included discrete manufacturers, utilities, hospitals, process companies, transportation authorities, educational systems, and government agencies.
Indus Group CEO Robert W. Felton became the chairman and CEO of Indus International, while TSW International President and CEO Christopher R. Lane was named vice-chairman and president of strategy and product development. The newly formed enterprise had an expanded sales force of 120 people, and continued on its previous strategic course of supporting business segments within vertical markets. PassPort and Enterprise MPAC software became Indus International's two main product lines.
Building on the international presence that Indus Group and TSW already had prior to the merger, Indus International continued global expansion efforts with the formation of a wholly owned subsidiary called Indus International Canada Inc. in February 1998. At this time, a new office also was added in Buenos Aires, Argentina, to support Latin American/Caribbean customers. A third Australian office was added in May. Located in Melbourne, the new site joined existing offices in Brisbane and Sydney. Other developments in 1998 included the incorporation of Indus International's EAM system into Oracle Corporation's Oracle Energy business software suite, as well as $2 million in new education sector contracts, including one with the Yale University School of Medicine. Indus' revenues reached $195.5 million, up from $177 million in 1997. Net income for 1998 reached $13.4 million, up from $990,000 the previous year.
In 1999 Indus International benefited from a three-year, $60 million deal with British Energy. In addition to providing software and services to British Energy, Indus stood to improve its offerings by learning about the company's best practices and using that information to improve its software products. It also was in 1999 that Indus announced the publication of a new quarterly magazine called Indus Insight. Developed for the company's EAM customers, the new magazine contained best practices, tips, articles from customers and users, and information about industry trends.
Indus' history is filled with successful client implementations, pioneering breakthroughs in technology, and numerous industry accolades and recognition. This proud history has made Indus the most experienced EAM [enterprise asset management] software company, with the most innovative and functionally-rich solutions in the industry.
Challenges in the Early 2000s
Indus International started the new millennium with the January appointment of Kent O. Hudson as president and CEO. Hudson, who served as a consultant to Indus during 1999 when the company designed its myindus.com Web portal, was the former president and CEO of Carolina Power and Light subsidiary Strategic Resource Solutions. Hudson replaced William Grabske, who had served an 11-month term as CEO. Indus credited Grabske with bolstering the company's internal processes and bringing discipline to its global operations. However, following his departure, Grabske sued Indus over the reimbursement of more than $100,000 in expenses and severance pay matters.
Shortly after this leadership change, a group of shareholders filed a class action lawsuit against Indus when the company's auditors indicated that third quarter 1999 revenues had been overstated. According to an April 7, 2000, Business Wire release, the lawsuit specifically charged "Indus International and certain of its officers and directors with issuing false and misleading statements concerning the Company's business and prospects."
By January 2001 the U.S. District Court for Northern California had approved a $4.3 million settlement between Indus and its shareholders. While this brought an end to the matter for the company, in September 2001 the Securities and Exchange Commission filed criminal and civil charges against Grabske and another former Indus executive, alleging that they had engaged in fraudulent accounting activity.
Amidst these challenges, Indus continued to introduce new offerings for its customers in 2000. The company integrated e-procurement software called IndusBuyDemand with its asset management offerings. This allowed Indus clients to take advantage of Internet exchanges and marketplaces. The company also unveiled a line of integration tools called IndusConnect, which enabled its clients to link software from other vendors to Indus applications. Initially, the company released tools pertaining to document control, GIS, and financial services. It also was in 2000 that Indus expanded its Canadian operations. In addition to more Canadian staff and office locations, Indus sought to increase strategic partnerships with other firms, increase its share of the application service provider market, and focus on small and medium-sized businesses.
By the beginning of 2001 Indus had moved beyond difficult legal challenges, as well as a number of management changes that included key leadership. However, the company was faced with falling revenues and declining market share. In 2000 the company's revenues totaled $145.7 million, with a net loss of $58.8 million. This compared to revenues of $178.5 million and net income of $23.8 million in 1999.
In the January 19, 2001 issue of the San Francisco Business Times, META Group Vice-President Hollis Bischoff offered his view on Indus' predicament, commenting: "They were in the middle of their troubles when e-business took off . . . and by the time they figured out how to get on the e-train, that one had passed. They've suffered from bad timing and bad organization and it's going to take a while to get back in place, if there's a place for them to get back to."
Indus relocated its headquarters in May 2001. The company, which then employed some 1,000 workers in 18 offices throughout the world, moved from 60 Spear Street in San Francisco to a 107,200-square-foot facility at 3301 Windy Ridge Parkway in Atlanta. CEO Kent Hudson indicated that the more affordable real estate market in Atlanta would help the company in its effort to reduce expenses and increase shareholder value. The move included Indus' marketing, finance, and accounting operations, among others.
In 2001 Indus introduced a new PassPort software module called IndusAnyWare, which it developed in conjunction with IBM. In a January 10, 2001, PR Newswire release, the company said the module, which was part of its Indus Solution Series, offered: "the mobile computing architecture, mobile server and client application to extend the core asset management capabilities of PassPort's Work Management product to field personnel." Indus also released version 9.0 of its PassPort software, which was easier to use than past versions and included improvements related to safety and compliance, supply chain, and work management functions.
Indus' clients credited the company with improving its customer service during 2001. In the September 17, 2001, issue of Computerworld, Indus International User Group President Steve Thomas said that customers were very frustrated with the management team Indus had in place prior to CEO Kent Hudson, but that Hudson was more receptive to the needs of users and had even established a channel through which functionality upgrade requests could be submitted.
Indus ended 2001 with revenues of $176 million, up from $145.7 million in 2000. After reporting losses for seven consecutive quarters, the company reported a quarterly profit in October. While Indus once again experienced an annual net loss, at $11.5 million its losses were down from $58.8 million the previous year.
- The System Works International Inc. (TSW) is founded.
- The Indus Group Inc. is established.
- The Indus Group ranks third (first in California) on the Inc. list of America's 500 fastest growing private companies.
- Indus merges with TSW to form Indus International, the world's largest enterprise asset management software company.
- Company continues global expansion efforts with new offices in Canada, Argentina, and Australia.
- Indus relocates its headquarters to Atlanta. Employees number 1,000 in 18 offices throughout the world.
- Indus expands in Japan and China.
- Indus acquires Global Energy and Utilities Solutions for $37.8 million.
- Indus acquires Wishbone Systems Inc., a provider of workforce management and optimization software.
Indus expanded its Asian presence during 2002. In April, the company announced that it had enhanced its Tokyo office, formed a partnership with Kaihatsu Computing Service Center Ltd., and contracted with Japan's Electric Power Development Company Ltd. In December, China Business News reported that Indus had formed a partnership with Yao De Computer Software—an arm of A3 Systems Ltd.—to market its EAM Solutions in mainland China.
A number of significant leadership changes occurred at Indus in 2002. In January Thomas R. Madison was named chairman. That July, Madison assumed the additional role of CEO, replacing Kent Hudson. At that time, Chief Operating Officer Richard H. Beatty also parted ways with Indus after his position was eliminated as part of a larger effort to cut costs, restructure operations, and achieve profitability. Faced with weak IT spending in the utility and mining sectors, the company also planned to cut staff within its professional services group. Revenues for 2002 fell to $117.2 million, with a net loss of $33.8 million.
Indus started off 2003 by joining the Nuclear Energy Institute (NEI), the policy organization for the nuclear energy industry. The company announced that it would collaborate with the NEI and its members to develop standards and share best practices. In April Indus continued its Asian expansion efforts by inking a deal to provide software to Tokyo Electric Power Company., the world's largest private electric power company and the largest electrical utility in Japan.
In June 2003 Indus finalized its acquisition of Systems & Computer Technology Corporation's subsidiary Global Energy and Utilities Solutions (GEUS). The $37.8 million acquisition was expected to generate $60 million in annual revenues for Indus from licenses, maintenance, and service. GEUS eventually was renamed Indus Utility Systems. The deal prompted Indus to change its fiscal year-end from December 31 to March 31 in order to make it easier to compare the financial performance of the combined companies.
Approximately two months after the GEUS deal was finalized, Indus Executive Vice President Gregory J. Dukat was promoted to president and chief operating officer. That November, the company announced a new strategic initiative that aimed to help long-term revenue growth. Called Service Delivery Management (SDM), it essentially involved expanding Indus' market outside of the utility sector to include original equipment manufacturers and third-party service providers.
Indus began 2004 by acquiring Wishbone Systems Inc., a provider of workforce management and optimization software. In February, Indus President and COO Gregory Dukat assumed the additional role of CEO from Thomas Madison, who remained company chairman. The transition came at a positive time for the company, as it celebrated its third consecutive quarter of profitability. In addition, Indus announced a customer loyalty initiative called Indus Service Select that involved a corporate reorganization effort. According to a February 2, 2004, Business Wire release, Indus "combined its separate product development teams into a single organization and merged that group with the Customer Service Division to form the Global Development and Client Services (GDCS) group. Furthermore, the company has placed the responsibility for developing strategy and vision for these products into a separate and independent Product Strategy organization."
Although Indus reported a fiscal year 2004 net loss of $12 million on revenues of $146.4 million, the company appeared to be on the road to recovery after a series of profitable quarters and a broadening client base. In August Indus announced that it has signed SDM deals with three new customers in France in the areas of facilities management, healthcare, and transportation.
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Alvey, Jennifer, "Indus Absorbs SCT Unit," Public Utilities Fortnightly, June 1, 2003.
"British Energy and Indus International Sign Ground-Breaking Enterprise Asset Management Partnership Deal," European Report, June 9, 1999.
Brown, Jennifer, "Indus Arming for Expansion Bid: More Staff, New President Marks Second Anniversary in Canada," Computing Canada, July 7, 2000.
Fried, Rinat, "The Indus Group Inc. Targets Industrial Niche," Recorder, March 13, 1996.
"Indus Announces Reengineering Services for Electric Utilities &
Petrochemical Industries," Business Wire, January 27, 1994.
"Indus International Relocates Corporate Headquarters to Atlanta," Business Wire, May 25, 2001.
"Indus International Teams with IBM to Develop Mobile Computing Solution—IndusAnyWare," PR Newswire, January 10, 2001.
"Indus Opens New Office," Computergram International, May 21, 1998.
"Indus Reorganizes to Support Customer Loyalty Initiative," Business Wire, February 2, 2004.
Liedtke, Michael, "Feds File Charges of High-tech Fraud, Say More Cases in Works," Associated Press State & Local Wire, September 6, 2001.
"Lionbridge and Indus Expand into China in Partnership with Chinasoft and Yao De, Respectively," China Business News, December 12, 2002.
"Shareholder Class Action Filed Against Indus International, Inc. by the Law Firm of Schiffrin & Barroway, LLP," PR Newswire, April 7, 2000.
Songini, Marc L., "Indus Replaces CEO, Plans Cuts in New Turnaround Bid," Computerworld, July 8, 2002.
——, "Users Credit Indus with Changing," Computerworld, September 17, 2001.
Temple, James, "Cost-Conscious Indus Shops Around Sublease Space," San Francisco Business Times, January 19, 2001.
—Paul R. Greenland