Nokia deal underlines Kewill’s SaaS future

(By Philip Carnelley, 19 Aug 09, 10:00) We had an in-depth briefing yesterday from Paul Nichols and the senior management team at Kewill Systems, the ‘Global Trade Management’ (logistics) software company. There was a lot of information, and we’ll no doubt return to it in future notes. There were three immediate takeaways. First, we discussed the Nokia contract win announced earlier this week, which caused Kewill’s share price to jump 14%. Kewill can’t say much for contractual reasons but we did glean that it’s one of the biggest in Kewill's history, (which we guess means it's in seven figures) and will be deployed across the whole of Nokia, to support its handset repair and return operation – and that it’s entirely a software as a service (SaaS) solution.

This leads to the second point – Kewill’s clients, like Nokia, are adopting SaaS with alacrity. Most strikingly, its UK customer-base – the oldest-established part of its business – has switched almost entirely to SaaS in seven years: now 90% of clients are on SaaS contracts. Its major global logistics customers such as TNT are SaaS enthusiasts too, not least because it makes it easier to provision solutions to their customers. Last year, 47% of Kewill's software revenues (i.e. excluding services) were from SaaS contracts, and the proportion continues to rise.

Third, even in a major downturn, customers are willing to spend on software solutions where there is a clear business case. Kewill’s proposition can include reduced inventory and time to market through faster customs clearance, or higher sales through customer satisfaction and fewer product returns. They particularly cited Maersk, which signed a multi-million dollar contract with Kewill in the same week it announced a $1bn internal cost reduction programme, being convinced of the business case. Encouraging news for all our clients.

Many thanks to Paul and the team for their time and attention.