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Friday, Jul 10th

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MGI 360 Ratings - Apttus/Conga in Configure-Price-Quote (CPQ)

MGI 360 LogoSUMMARY: We are initiating coverage of Apttus in the Configure-Price-Quote (CPQ) market with an MGI 360 Rating of 56 and a Neutral outlook.

OPINION: This initial rating takes into account the near-term impact of acquisition of Conga. Apttus is one a few CPQ suppliers able to cross the physical-digital product divide and handle CPQ for digital  services, complex engineer-to-order solutions and  hybrid offerings. The CPQ product offers a broad range of configuration and price management capabilities  including subscription, usage, and dynamic pricing and can support  advanced  visualization  via partners  such as  CDS and ThreeKit. Apttus  CPQ is unique in its ability to integrate tightly with Contract Lifecycle Management (CLM). Apttus CPQ is built on and integrated with Salesforce.com and can also enmesh into Microsoft Azure and connect with SAP Variant Configurator. Post-acquisition, Apttus/Conga will emerge with a stronger management team, a 2nd largest direct sales channel focused on CPQ, and more opportunities for growth. In CPQ specifically, Apttus is still dealing with long-term customer challenges inherited by current management  from the original Apttus leadership. The changes Apttus implemented in the last 18-24 months prior to the Conga acquisition demonstrate that the company is on a solid foundation for continued growth. 

USE CASE: Companies with a variety of business models (physical, digital, hybrid) with revenues above $500 Million, with medium to high complexity in configuration and pricing.

COMPANY DESCRIPTION: Apttus is aiming at markets that it terms Middle Office - solutions that act as a bridge between front-line sales automation and traditionally back-office functional units in finance, procurement and manufacturing. The product line spans monetization and procure-to-pay cycles with tools such as Configure-Price-Quote (CPQ), Contract Lifecycle Management (CLM), Billing, Order Management, e-Commerce, Revenue Recognition and now through an estimated $715 Million May 2020 acquisition of Conga, Document Generation, Workflow Automation and e-Signature. The combined company, now re-branded as Conga, is backed by private equity firm Thoma Bravo and Insight Ventures and led by Apttus CEO Frank Holland. We  estimate that the original Apttus product line had over 900 customers, with Conga adding around  ten thousand  mostly  SMB accounts. The combined company is estimated to generate over $400 Million in annual revenue with just under 2,000 employees.

COMPETITORS: Salesforce.com, Oracle, SAP SE, PROS Holdings, Tacton, FPX

ABOUT MGI 360 RATINGS

MGI 360 Ratings is a comprehensive system for evaluating technology companies. IT organizations use MGI 360 to track suppliers, assess purchasing risks and identify promising new vendors. Vendors utilize MGI 360 to track their markets and evaluate partners. Institutional investors use MGI 360 for independent assessment of tech companies. MGI 360 ratings help lower costs, save time, reduce risks, and identify new opportunities.

The MGI 360 ratings are on a scale from 0 to 100 and reflect company opinions of MGI analysts in five key areas on a scale of 0 to 20:

  • PRODUCT: How strong is the product competitive position
  • MANAGEMENT: How competent and experienced is the management team
  • CHANNELS: Does the company have a sales capability and channels needed to bring products to market?
  • STRATEGY: Does the company have a realistic view of the opportunity and a compelling strategy for success?
  • FINANCE: Is the company growing and profitable

Each of these key criteria is subdivided into numerous sub-categories. In total, over 149 criteria are combined to generate an MGI 360 rating in each specific market space. Companies can have one or more MGI 360 rating - one for each market. MGI 360 ratings are revised as important developments occur. While the MGI 360 rating process is comprehensive, this scoring system is not meant to be a predictor of company solvency, liquidity, absence of accounting fraud or stock performance. Access to MGI 360 Ratings is by subscription.

ABOUT MGI RESEARCH

MGI Research is an independent industry research and advisory firm focused on disruptive trends in the technology industry. Through ratings, industry benchmarks, best practices groups, subscription research, market forecasts, advisory engagements, industry studies and conferences, MGI Research helps clients identify opportunities for reducing IT costs and minimize technology risks. MGI Research analysts work closely with business and technology organizations to help make timely go/no-go IT investment decisions, optimize vendor relationships, and create practical strategies for new initiatives in agile billing, payments management, order management, CPQ, contract lifecycle management and other elements of agile monetization platform (AMP).

For additional information on research coverage of Configure-Price-Quote (CPQ), please see Key Issues in CPQ Research.

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