ARTG » Topics » Overview

These excerpts taken from the ARTG 10-K filed Mar 2, 2009.
Overview
 
We provide software and services that help online businesses increase their revenues. We seek to differentiate ourselves by offering solutions that enable our customers to provide a richer, more personalized and more compelling online shopping experience. We provide merchandisers and marketers more control over the online channel, and enable customer service agents to provide consumers more consistent, personalized and relevant assistance. Our solutions deliver better consistency and relevancy by capturing and maintaining information about customers’ personal preferences, online activity, and transaction history, and by using this information to deliver more personalized and contextual content.
 
Our ATG Commerce Suite consists of solutions delivered through perpetual software licenses or delivered as recurring SAAS solutions. Our ATG e-Commerce Optimization Services interoperate with any e-commerce platform, and are delivered as recurring SaaS solutions. Our e-commerce optimization services include Click-to-Call, Click-to-Chat, Call Tracking services and Recommendation services.
 
We market our products and services primarily to Global 2000 companies and other businesses that have large numbers of online users and utilize the Internet as an important business channel. We focus primarily on businesses in the retail, consumer products, manufacturing, media and entertainment, telecommunications, financial services, travel and insurance industries. We have approximately 700 customers, including more of the Top 500 Internet retailers than any other e-commerce solution vendor. Amazon, American Eagle Outfitters, American Express, AOL, AT&T, Best Buy, B&Q, Cabela’s, Carrefour, Cingular, Coca Cola, Collective Brands, Conde Nast, Continental Airlines, Dell, DirecTV, El Corte Ingles, Expedia, France Telecom, Harvard Business School Publishing, Hewlett-Packard, Intuit, Hilton, HSBC, L.L Bean, Lexmark, Macy’s, Meredith, Microsoft, Neiman Marcus, New York & Company, Nokia, Nutrisystem, OfficeMax, Overstock.com, PayPal, Philips, Procter & Gamble, Sears, Shop Direct Group, Sony, Sprint, Symantec, T Mobile, Target, Urban Outfitters, Verizon, Viacom, Vodafone, Walgreens, and Williams Sonoma.


1


Table of Contents

Our business has evolved significantly since our incorporation in 1991:
 
  •  Until 1995, we functioned primarily as a professional services organization in the Internet commerce market.
 
  •  In 1996, we began offering Internet commerce and software solutions, initially focusing on infrastructure products.
 
  •  In 2004, we began to concentrate on developing application products, having concluded that the market for infrastructure products had become increasingly standards driven and that we could best differentiate ourselves by offering our clients advanced applications functionality.
 
  •  In November 2004, we acquired Primus Knowledge Solutions, Inc. (“Primus”), a provider of software solutions for customer service designed to help companies deliver a superior customer experience via contact centers, e-mail and web self-service. The Primus solution extended our offerings beyond commerce and marketing and into customer service.
 
  •  In 2004, we also began to offer our clients hosted SaaS services as an alternative delivery model for our application solutions, having concluded that hosted services could provide significant advantages for our clients, and provide us with a substantial opportunity for growth.
 
  •  In 2005, we completed the integration of Primus applications into the ATG platform.
 
  •  In October 2006, we acquired eStara, Inc. (“eStara”), a provider of e-commerce optimization service solutions for enhancing online sales and support initiatives. The eStara solutions provided us with a new channel to help our clients convert web browsing activities into sales, as well as business opportunities independent of ATG-powered websites.
 
  •  In 2007, we initiated a strategy to offer our e-commerce platform solutions in combination with our site-independent SaaS services. One result of this strategy is that we recognize revenue from more of our transactions on a ratable basis.
 
  •  In February 2008, we acquired CleverSet, a provider of automated personalization engines, used to optimize e-commerce experiences by presenting visitors with relevant recommendations and information. CleverSet’s next-generation technology has been shown to significantly lift e-commerce revenue by increasing conversion rates and order size. We offer these services as ATG Recommendations within the optimization services product line.
 
Online retailers periodically upgrade or replace the network and enterprise applications software and the related hardware systems that they use to run their e-commerce operations in order to take advantage of advances in computing power, system architectures and enterprise software functionality that enable them to increase the capabilities of their e-commerce systems while simplifying operation and maintenance of these systems and reducing their cost of ownership. We refer to these major system upgrades or replacements as “replatforming.”
 
We believe that a company’s replatforming is a significant event that often leads to a sale of an e-commerce platform software license. We believe that on average, customers in our market replatform or refresh their e-commerce software approximately every five years.
 
Overview


 



We provide software and services that help online businesses
increase their revenues. We seek to differentiate ourselves by
offering solutions that enable our customers to provide a
richer, more personalized and more compelling online shopping
experience. We provide merchandisers and marketers more control
over the online channel, and enable customer service agents to
provide consumers more consistent, personalized and relevant
assistance. Our solutions deliver better consistency and
relevancy by capturing and maintaining information about
customers’ personal preferences, online activity, and
transaction history, and by using this information to deliver
more personalized and contextual content.


 



Our ATG Commerce Suite consists of solutions delivered through
perpetual software licenses or delivered as recurring SAAS
solutions. Our ATG
e-Commerce
Optimization Services interoperate with any
e-commerce
platform, and are delivered as recurring SaaS solutions. Our
e-commerce
optimization services include Click-to-Call, Click-to-Chat, Call
Tracking services and Recommendation services.


 



We market our products and services primarily to Global
2000 companies and other businesses that have large numbers
of online users and utilize the Internet as an important
business channel. We focus primarily on businesses in the
retail, consumer products, manufacturing, media and
entertainment, telecommunications, financial services, travel
and insurance industries. We have approximately 700 customers,
including more of the Top 500 Internet retailers than any other
e-commerce
solution vendor. Amazon, American Eagle Outfitters, American
Express, AOL, AT&T, Best Buy, B&Q, Cabela’s,
Carrefour, Cingular, Coca Cola, Collective Brands, Conde Nast,
Continental Airlines, Dell, DirecTV, El Corte Ingles, Expedia,
France Telecom, Harvard Business School Publishing,
Hewlett-Packard, Intuit, Hilton, HSBC, L.L Bean, Lexmark,
Macy’s, Meredith, Microsoft, Neiman Marcus, New
York & Company, Nokia, Nutrisystem, OfficeMax,
Overstock.com, PayPal, Philips, Procter & Gamble,
Sears, Shop Direct Group, Sony, Sprint, Symantec, T Mobile,
Target, Urban Outfitters, Verizon, Viacom, Vodafone, Walgreens,
and Williams Sonoma.





1





Table of Contents






Our business has evolved significantly since our incorporation
in 1991:


 
































































































  • 

Until 1995, we functioned primarily as a professional services
organization in the Internet commerce market.
 
  • 

In 1996, we began offering Internet commerce and software
solutions, initially focusing on infrastructure products.
 
  • 

In 2004, we began to concentrate on developing application
products, having concluded that the market for infrastructure
products had become increasingly standards driven and that we
could best differentiate ourselves by offering our clients
advanced applications functionality.
 
  • 

In November 2004, we acquired Primus Knowledge Solutions, Inc.
(“Primus”), a provider of software solutions for
customer service designed to help companies deliver a superior
customer experience via contact centers,
e-mail and
web self-service. The Primus solution extended our offerings
beyond commerce and marketing and into customer service.
 
  • 

In 2004, we also began to offer our clients hosted SaaS services
as an alternative delivery model for our application solutions,
having concluded that hosted services could provide significant
advantages for our clients, and provide us with a substantial
opportunity for growth.
 
  • 

In 2005, we completed the integration of Primus applications
into the ATG platform.
 
  • 

In October 2006, we acquired eStara, Inc. (“eStara”),
a provider of
e-commerce
optimization service solutions for enhancing online sales and
support initiatives. The eStara solutions provided us with a new
channel to help our clients convert web browsing activities into
sales, as well as business opportunities independent of
ATG-powered websites.
 
  • 

In 2007, we initiated a strategy to offer our
e-commerce
platform solutions in combination with our site-independent SaaS
services. One result of this strategy is that we recognize
revenue from more of our transactions on a ratable basis.
 
  • 

In February 2008, we acquired CleverSet, a provider of automated
personalization engines, used to optimize
e-commerce
experiences by presenting visitors with relevant recommendations
and information. CleverSet’s next-generation technology has
been shown to significantly lift
e-commerce
revenue by increasing conversion rates and order size. We offer
these services as ATG Recommendations within the optimization
services product line.


 



Online retailers periodically upgrade or replace the network and
enterprise applications software and the related hardware
systems that they use to run their
e-commerce
operations in order to take advantage of advances in computing
power, system architectures and enterprise software
functionality that enable them to increase the capabilities of
their
e-commerce
systems while simplifying operation and maintenance of these
systems and reducing their cost of ownership. We refer to these
major system upgrades or replacements as
“replatforming.”


 



We believe that a company’s replatforming is a significant
event that often leads to a sale of an
e-commerce
platform software license. We believe that on average, customers
in our market replatform or refresh their
e-commerce
software approximately every five years.


 




Overview
 
This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and notes thereto which appear elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking statements. See “Risk Factors” elsewhere in this Annual Report on Form 10-K for a discussion of important factors and risks associated with our business that could cause our actual results to differ materially from these forward-looking statements. The forward-looking statements do not include the potential impact of any mergers, acquisitions, or divestitures of business combinations that may be announced after the date hereof.
 
We develop and market a comprehensive suite of e-commerce software products, as well as provide related services in conjunction with our products, including support and maintenance, professional services, managed application hosting services, and e-commerce optimization services for enhancing online sales and support. We primarily derive revenue from the sale of software products and related services. Our software licenses are priced based on the size of the customer implementation. Our recurring services revenue is comprised of managed application hosting services, e-commerce optimization services, and support and maintenance services. Managed application hosting revenue is recognized monthly as the services are provided based on a per transaction, per CPU or percent of customer’s revenue basis. e-commerce optimization services are priced on a per transaction basis and recognized monthly as the services are provided. Support and maintenance arrangements are priced based on the level of support services provided as a percent of net license fees per annum. Under support and maintenance services, customers are generally entitled to receive software upgrades and updates, maintenance releases and technical support. Professional and education services revenue includes implementation, technical consulting and education training. We bill professional service fees primarily on a time and materials basis. Education services are billed as services are provided.
 
Overview


 



This Management’s Discussion and Analysis of Financial
Condition and Results of Operations should be read in
conjunction with our consolidated financial statements and notes
thereto which appear elsewhere in this Annual Report on
Form 10-K.
The following discussion contains forward-looking statements.
See “Risk Factors” elsewhere in this Annual Report on
Form 10-K
for a discussion of important factors and risks associated with
our business that could cause our actual results to differ
materially from these forward-looking statements. The
forward-looking statements do not include the potential impact
of any mergers, acquisitions, or divestitures of business
combinations that may be announced after the date hereof.


 



We develop and market a comprehensive suite of
e-commerce
software products, as well as provide related services in
conjunction with our products, including support and
maintenance, professional services, managed application hosting
services, and
e-commerce
optimization services for enhancing online sales and support. We
primarily derive revenue from the sale of software products and
related services. Our software licenses are priced based on the
size of the customer implementation. Our recurring services
revenue is comprised of managed application hosting services,
e-commerce
optimization services, and support and maintenance services.
Managed application hosting revenue is recognized monthly as the
services are provided based on a per transaction, per CPU or
percent of customer’s revenue basis.
e-commerce
optimization services are priced on a per transaction basis and
recognized monthly as the services are provided. Support and
maintenance arrangements are priced based on the level of
support services provided as a percent of net license fees per
annum. Under support and maintenance services, customers are
generally entitled to receive software upgrades and updates,
maintenance releases and technical support. Professional and
education services revenue includes implementation, technical
consulting and education training. We bill professional service
fees primarily on a time and materials basis. Education services
are billed as services are provided.


 




These excerpts taken from the ARTG 10-K filed Mar 17, 2008.
Overview
 
This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and notes thereto which appear elsewhere in this Annual Report on Form 10-K. See “Risk Factors” elsewhere in this Annual Report on Form 10-K for a discussion of certain risks associated with our business. The following discussion contains forward-looking statements. The forward-looking statements do not include the potential impact of any mergers, acquisitions, or divestitures of business combinations that may be announced after the date hereof.
 
We develop and market a comprehensive suite of e-commerce software products, as well as provide related services in conjunction with our products, including support and maintenance, professional services, managed application hosting services, eStara e-commerce optimization services solutions for enhancing online sales and support. We primarily derive revenue from the sale of software products and related services. Our software licenses are priced based on the size of the customer implementation. Services revenue is derived from fees for recurring services, professional services and education services. Our recurring services revenue is comprised of managed application hosting services, eStara e-commerce optimization service solutions and support and maintenance. Managed application hosting revenue is recognized monthly as the services are provided based on a per transaction, per CPU or percent of customer’s revenue basis. eStara e-commerce optimization service solutions are priced on a per transaction basis and recognized monthly as the services are provided. Support and maintenance arrangements are priced based on the level of support services provided as a percent of net license fees per annum. Under support and maintenance services, customers are generally entitled to receive software upgrades and updates, maintenance releases and technical support. Professional and educational service revenue includes implementation, custom application development, technical consulting and educational training. We bill professional service fees primarily on a time and materials basis. Education services are billed as services are provided.
 
Overview


 



This Management’s Discussion and Analysis of Financial
Condition and Results of Operations should be read in
conjunction with our consolidated financial statements and notes
thereto which appear elsewhere in this Annual Report on
Form 10-K.
See “Risk Factors” elsewhere in this Annual Report on
Form 10-K
for a discussion of certain risks associated with our business.
The following discussion contains forward-looking statements.
The forward-looking statements do not include the potential
impact of any mergers, acquisitions, or divestitures of business
combinations that may be announced after the date hereof.


 



We develop and market a comprehensive suite of
e-commerce
software products, as well as provide related services in
conjunction with our products, including support and
maintenance, professional services, managed application hosting
services, eStara
e-commerce
optimization services solutions for enhancing online sales and
support. We primarily derive revenue from the sale of software
products and related services. Our software licenses are priced
based on the size of the customer implementation. Services
revenue is derived from fees for recurring services,
professional services and education services. Our recurring
services revenue is comprised of managed application hosting
services, eStara
e-commerce
optimization service solutions and support and maintenance.
Managed application hosting revenue is recognized monthly as the
services are provided based on a per transaction, per CPU or
percent of customer’s revenue basis. eStara
e-commerce
optimization service solutions are priced on a per transaction
basis and recognized monthly as the services are provided.
Support and maintenance arrangements are priced based on the
level of support services provided as a percent of net license
fees per annum. Under support and maintenance services,
customers are generally entitled to receive software upgrades
and updates, maintenance releases and technical support.
Professional and educational service revenue includes
implementation, custom application development, technical
consulting and educational training. We bill professional
service fees primarily on a time and materials basis. Education
services are billed as services are provided.


 




This excerpt taken from the ARTG DEF 14A filed Apr 16, 2007.
Overview
 
The board’s Compensation Committee seeks to achieve the following goals with our executive compensation programs: to attract, motivate and retain key executives and to reward executives for value creation. By responding to the market pressures in the software industry and rewarding executive performance, the Compensation Committee seeks to foster a performance-oriented environment that is attractive to top executive talent by tying a significant portion of each executive’s cash and equity compensation to the achievement of our performance targets.
 
Our executive compensation program has three elements: base salary, cash incentive compensation and equity incentive awards. Cash incentive compensation for 2006 was awarded under the 2006 Executive Management Compensation Plan, which was adopted on February 10, 2006 (the “Compensation Plan”). As of December 31, 2006, equity incentives have been awarded to our executives in the form of stock option awards which are granted under our Amended and Restated 1996 Stock Option Plan. However, beginning in 2007, we will begin awarding restricted stock units to executives, which are also granted under our 1996 Stock Plan.
 
We decide upon the mix of compensation through committee discussion and individual executive performance reviews. For instance, the Chief Executive Officer gets a “360 review” which for 2006 focused on his development of our management team, interactions with key customers and his ability to expand market coverage. Such reviews are important in figuring out what forms of compensation will best help the executives reach the goals we set for their performance for the year.
 
Overview
 
We develop and market a comprehensive suite of e-commerce software products, as well as provide related services including support and maintenance, education, application hosting, professional services and proactive conversion solutions for enhancing online sales and support. We primarily derive revenue from the sale of software products and related services. Our software licenses are priced based on the size of the customer implementation. Services revenue is derived from fees for professional services, training, support and maintenance, application hosting and proactive conversion solutions. Professional services include implementation, custom application development and project and technical consulting. We bill professional service fees primarily on a time and materials basis. Support and maintenance arrangements are priced based on the level of support services provided as a percent of net license fees on a per annum basis. Under support and maintenance services, customers are generally entitled to receive software updates, maintenance releases and technical support. Training is billed as services are provided. Revenue from application hosting services is recognized monthly as the services are provided based on a per transaction, per CPU or percent of revenue basis. Proactive conversion solutions, recently offered as a result of the eStara acquisition, are priced on a per transaction basis and recognized monthly as the services are provided.
 
This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and notes thereto which appear elsewhere in this Annual Report on Form 10-K. See “Risk Factors” elsewhere in this Annual Report on Form 10-K for a discussion of certain risks associated with our business. The following discussion contains forward-looking statements. The forward-looking statements do not include the potential impact of any mergers, acquisitions, or divestitures of business combinations that may be announced after the date hereof.
 
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