UNIT4 Strengths, Domain Expertise, and Key Differentiators
Unit4 is focused on four strategic industry verticals: professional services organizations, higher education, public services, not-for-profit, and offer back-office ERP as well as domain-specific front office functionality for these verticals. It has expanded its reach by acquiring Intuo, a Talent Management Solution, Prevero, which sells Corporate Performance Management and Business Intelligence apps as well as its purchase of 3 Rivers which gave Unit4 additional products for student information systems. Altogether, Unit4 is well-positioned to become the one-stop shop for customers in these four verticals, which represent more than two-thirds of its revenues and bookings.
Next-generation ERPx saw some immediate success. It had already signed 24 new customers before the product was GA. It was heralded by analysts as the most advanced ERP platform in the market. By combining its mid-market industry experience with a laser focus on people-centric businesses and an industry-leading cloud platform, Unit4 delivered unified ERP, finance, and HR solutions that are industry-specific or ‘Right for Your Business’ out of the box. All the efforts outlined in “Recent Developments” have paid off as evidenced by Q3 results: Cloud subscription revenue increased 27% (YTD) on the comparable period in 2020, with Annual Recurring Revenue growth of 26% (YoY) Cloud bookings increased 14%, with 11% total bookings growth and 34 new customers signed including North Sea Port, The Volvo Dealers' Association, Amplit, Necto AS, Punch Consulting, Simcoe Muskoka Catholic District School Board, and Durham Catholic District School Board ERPx momentum builds with 62 new customers to the end of Q3 55 successful go-lives in the quarter; 104% net revenue retention 29% growth (YoY) on the value of contracts via partners EBITDAC growth of 8% (YoY)
UNIT4 Recent Developments
In April 2021 Unit4 announced the General Availability (GA) of ERPx, its next-generation intelligent Enterprise Resource Planning (ERP) solution built specifically for mid-market, people-centric organizations. This announcement came on the heels of its announcement regarding the strategic growth buyout by TA Associates in excess of US$2 Billion. It was March 2021 when Unit4 signed a definitive agreement to receive a majority investment from TA Associates, a leading global growth private equity firm. Partners Group, a leading global private markets firm, will invest alongside TA, on behalf of its clients. Mike Ettling, CEO of Unit4, continues to lead the company, supported by the existing management team. Advent International, the then-current majority shareholder in Unit4, exited its stake in the company.
Unit4’s also introduced Onboarding4U, a new program that provides a seamless, repeatable, and programmatic approach to getting customers up and running, leveraging industry best practices and models that allow our customers to reduce time to get the value from their investment.
On June 30, 2021, Unit4 announced the company is separating its student information system (SIS) business. This action follows the strategic growth buyout of its global ERP lines of business by TA Associates. A new dedicated SIS business has been established that operates under the Thesis brand, to focus on SIS innovation to help global Higher Education customers succeed.
Throughout these structural and ownership changes, Mike Ettling remains as Chief Executive Officer. He was appointed in 2019. Following his appointment, Unit4 named Julie Knight as its Chief Marketing Officer, Brad Everett as VP Corporate Marketing, Beata Wright as EVP/Global Head of Partner Ecosystems, Lisa Dodman as Chief People Officer, Billy O'Riordan as SVP, Professional Services, and most recently, Mike Slater as COO and Jeremias Jansson as CSO roles.
UNIT4 Mergers and acquisitions (M&A) Activities
In 2021, Unit4 received a majority investment from TA Associates. Partners Group invested alongside TA, on behalf of its clients. Advent International, the current majority shareholder in Unit4 exited its stake in the company.
Furthermore, in 2021, Unit4 acquired Compright, a comprehensive compensation planning solution with customers in over 40 countries. The acquisition further extends the capabilities of Unit4’s ERPx by enabling organizations to automate the entire compensation process through seamless data integration and built-in analytics, utilizing all key factors required to calculate fair and rational total rewards across multiple geographies.
Earlier acquisitions include: Intuo, a provider of Talent Enablement solutions, to strengthen the HCM focus 3 Rivers (a provider of Student management solutions, known for delivering out-of-the-box solutions designed for higher education industries) Prevero (a provider of Financial Planning & Analysis solutions), known for delivering AI-based forecasting to the office of the CFO).
UNIT4 Customers in ARTW Customer Database
Leveraging a rigorous data-centric research methodology, APPS RUN THE WORLD asks the simple question: Who’s buying UNIT4 applications and why? And we provide the answers – supported by decades of research – to our clients around the world. Our Customer database has over 100 data fields that detail company usage of UNIT4 and other enterprise apps by function, customer size, industry, location, implementation status, partner involvement, Line of Business Key Stakeholders and IT decision makers contact details. List of Verified Unit4 Business World, Unit4 Financials, Unit4 Prevero (CPM), Unit4 Student Management, Unit4 PSA Suite, Unit4 Compright customers.
Ownership: - TA Associates, Partners Group
Number of Employees: 2600
Functional Market: Absence and Leave Management, Task Management, Time and Attendance, Core HR, Payroll, Benefits Administration, Pension Administration, Compliance, Recruiting, Performance and Goal Management, Learning and Development, Succession and Leadership Planning, Compensation,
Key Verticals: Aerospace and Defense, Automotive, Banking and Financial Services, Communications, Construction and Real Estate, Consumer Packaged Goods, Distribution, Education, Government, Healthcare, Insurance, Leisure and Hospitality, Life Sciences, Manufacturing, Media, Non Profit, Oil, Gas and Chemicals, Professional Services, Retail, Transportation, Utilites,
UNIT4 Key Cloud and HCM Applications
Unit4 Business World, Unit4 Financials, Unit4 Prevero (CPM), Unit4 Student Management, Unit4 PSA Suite, Unit4 Compright
UNIT4 HCM and Cloud HCM Applications Revenues, $M:
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|HCM Applications Revenues, $M||Subscribe||Subscribe||Subscribe|
|Cloud HCM Applications Revenues, $M||Subscribe||Subscribe||Subscribe|
* HCM Applications Revenues = License + Support & Maintenance + SaaS ( Hardware and Prof. Services are Excluded )
** All revenue figures are estimates based on public records, Cloud and Non-Cloud business models in Apps Run The World's vendor database, and annual survey results including vendor feedback.
UNIT4 Revenue Breakdown by Type:
|Type||License||Prof. Services||Hardware||Support & Maintenance||SaaS||PaaS||IaaS||Other (Non Enterprise Application Revenues)||Total|
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UNIT4 HCM Applications Revenues By Sub-Functional Markets, $M:
Split by Sub-Functional Markets
2020 HCM Revenues, By Sub-Functional Markets, $M
UNIT4 HCM Applications Revenues By Verticals, $M:
UNIT4 Total and HCM Applications Revenues by Region:
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UNIT4 Direct vs Indirect sales
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UNIT4 Customers - Breakdown by Geo, Size, Vertical and Product
No. of UNIT4 Customers: 6000
No. of UNIT4 HCM Applications Customers: 1000
No. of UNIT4 Cloud HCM Customers: 500
No. of UNIT4 Cloud HCM Subscribers: 3 million
Unit4 has more than 6,000 customers and more than a million users. A majority of its customers are in the professional services organizations and public services verticals. Unit4's core ERP is used by over 2,700 organizations worldwide. New customers signed in Q3 alone included North Sea Port, The Volvo Dealers' Association, Amplit, Necto AS, Punch Consulting, Simcoe Muskoka Catholic District School Board, and Durham Catholic District School Board. In July, Unit4 announced an extended agreement with RSM US LLP (RSM) for a further five years, as the sole provider delivering Unit4 Professional Services Automation (PSA), in the cloud, to half its workforce.
In 2019, Unit4 marked an increased number of customer wins in the Nordics. Some of them are Försvarets Materielverk, The Norwegian Post, Swedish municipality Alvesta, Titania in Sweden, and others. Other most recent customer wins include University Canada West, Toronto School of Management, DOF, IES Abroad, Niagara Parks Commission, Gloucestershire Constabulary, International Fund for Animal Welfare, The city of Port Coquitlam, Stanley Security, War Child, Bravida, and many more.
UNIT4 Market Opportunities, M&A and Geo Expansions
In March 2020, Unit4 announced that it would provide its employee engagement tool and out-of-the-box FP&A to companies free of charge during the COVID crisis, to help companies stay engaged with their people and support professional planning. Also, Unit4 announced a partnership with Arribated and lter on Raven Intel.
In October 2019, Unit4 unveiled a new People Planning and Analytics solution for organizations to create detailed people plans, especially for contingency planning in leave and absence management. It combines its prevero analytics tool with the core HR and finance products to provide deeper, more real-time insights into people constraints and trends. The full HCM offering includes payroll and the acquired Intuo employee engagement tool.
Earlier Unit4 started with a new Smart Automation Services for Unit4 Business World ERP customers, representing a major step in the continuous delivery of next-generation automation where people enjoy work more because processes drive themselves. The same month, Unit4 launched new cloud extensions that deliver extended functionality to Unit4 applications quickly and simply. Developed using Unit4's Extension Kit, these microservices-based extensions are available on Github, providing customers and partners with the freedom to develop differentiating front-end applications that benefit from the critical data held in their back-office systems. All these enhancements underscore Unit4's desire to bridge the process-heavy ERP systems with people-centric attributes to accommodate the shifting requirements of an agile enterprise with a new generation of workers and work habits.
Unit4 has a strong partnership with Microsoft and the Microsoft ecosystem and is aligning itself with the Microsoft platform by adopting products like Azure, SQL Server, Power BI, and natural language interfaces to power its Wanda digital assistant. A key growth driver lies in its People Platform, which is based on Unit4's domain expertise in addressing people skills issues through easy-to-use and deploy software.
There is plenty of room to grow by improving the skills of services industries through the use of better corporate insights, improved processes from expense management to reporting, as well as digital assistants that can remove frictions involving tasks such as search, discovery, and matching, and purging redundant business records and transactions. That's where the acquisition of Prevero and its launch of the Wanda digital bot come in handy.
In professional services, Unit4 FP&A has done well-helping organizations maximize value from project-based planning initiatives. The Wanda chatbot, built on Unit4's People Platform with help from Microsoft's Language Understanding Intelligent Service, delivers a conversational user interface that guides Unit4 ERP customers to complete tasks such as making absence requests for employee self-service and generating timesheets based on multiple data streams and GPS and beacon location data to track time.
UNIT4 Risks and Challenges
Even before the SIS spinout Unit4 had sold various parts under the leadership of CEO Mike Ettling. These were offset in recent years by a few acquisitions. But no new acquisitions were made this year. That may have been a smart move since structural changes like those we saw in 2021 can be quite disruptive. But in monitoring Unit4’s continued growth it will be important to make like-for-like comparisons.
In July 2020, Kerridge Commercial Systems (KCS) has acquired Unit4 Wholesale. Unit4 Wholesale is an ERP package for automating (wholesale) trading companies and distributors in the Benelux. Some forty years ago Unit4 started with this; the basis is the wholesale package Omnivers, later renamed Agresso Wholesale and subsequently marketed under the name Unit4 Wholesale. Unit4 has sold various parts under the leadership of CEO Mike Ettling in recent years but has also made a few acquisitions. The company wants to focus on providing business software to the professional services sector (worldwide) and a Dutch branch that focuses (sometimes local) solutions on accountancy, education, the non-profit sector, and government.
The back-to-back acquisitions of Intuo and JSKS suggested that Unit4's investors are shoring up its product development and HCM strategies, perhaps as a prelude to bolder steps to reinvent the company. The good news is that the commitment is firm and clear, but the lingering question is its ability to deliver on its vision.
After Unit4 went private in 2014 by becoming part of PE firm Advent International's investment portfolio, the vendor has gone through a series of management changes and product reboots. Its cloud migration is gaining traction, but far from complete. Many of its customers are accustomed to running its applications on-premise and they will stay there for a few more years. The upside potential is enormous given how diversified its installations have become. What's holding back Unit4 is its ability to execute at a time when drastic measures are commonplace among its rivals. Most ERP vendors reckon the time for change is being compressed because the window of opportunity is likely to close over the next five to 10 years.
UNIT4 Ecosystem, Partners, Resellers and SI
Unit4’s ecosystem is comprised of 3 types of partners: Go-To-Market (GTM) Partners: GTM Partners are an extension of Unit4’s organization and are responsible for selling, implementing, and supporting the Unit4 solutions. Service Partners: Service Partners are extensively trained on Unit4 solutions to enable fast implementation, integration solutions, and support services. Technology & Innovation Partners: Technology Partners optimize the functionality and performance of Unit4 solutions through software extensions and integrations.
In March, Unit4 launched a new Partner Developer Program, Developer 4U, designed to support partners building extensions to ERPx, delivering value to customers, and creating new revenue streams for partners. Later this year, Unit4 plans to launch its first App Marketplace, Marketplace 4U, enabling customers to deploy value-add applications. Developer 4U partners will have access to development environments, extension kit training, and a certification program.
In Q3, Unit4 reported 65% growth YTD (versus 2019) on the value of contracts via partners demonstrating the traction of its re-focused global partner program. In addition to three new global strategic partnerships (Avalara, Immedis, and Pagero), Unit4 has also entered into a partnership with groupelephant.com, enabling Unit4 to leverage its global presence and experience in designing, building, and implementing cloud-based, hybrid and on-premises ERP, HR and Payroll systems for the private sector, and Public Sector agencies.
Providing local access to sales, service, and support, Unit4 has operations in Australia, Austria, Belgium, Canada, Denmark, Estonia, Finland, France, Germany, Hungary, Indonesia, Ireland, Malaysia, Netherlands, Norway, Poland, Portugal, Singapore, Spain, Sweden, UK, United States.
UNIT4 Cloud Platform (PaaS) and Infrastructure (IaaS) Details
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Data used in research reports are derived from publicly available documents, continuous surveys of applications vendors, customers, resellers, Independent Software Vendors, systems integrators and other verifiable sources.
Vendor shares and market forecast results are based on a combination of existing databases as well as demand side and supply side research conducted throughout the year with validation from vendors, customers, channel partners and documentations such as earnings releases and 10Q and 10K filings, vertical industry studies, regional and country-level statistics from public and private institutions(i.e. colleges, universities, government agencies and trade associations).
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