Rumpff denies Baan is burning down

Rumpff denies Baan is burning down

Dutch software company Baan has hired an investment firm to provide strategic advice to its US operation, but local MD Gerhard Rumpff won't speculate on the outcome of such a move.

Rumpff did say that Baan and investment firm Lazard Freres & Co will discuss funding strategies, including the possibility of selling off peripheral elements of the company. He also assured ARN that any sell-off of assets in the US wouldn't affect local operations or its strong local channel strategies and affiliations.

Rumpff said that its channel is currently generating approximately 50 per cent of revenues, a stream he is hoping to see grow to 60 per cent.

`The whole business is expanding and we would like the channel to grow faster,' Rumpff said of Baan's logistics, ERP and CRM solutions. `The growth for these sorts of products is in the medium space and that is traditionally serviced by resellers.

`It is not that it is more profitable for us to go through the channel, but it is a very sensible route to market. [Channel partners] have a good level of expertise and access to the medium and lower mid-tier market space.

In regards to the arrival of strategy consultants in the US operations, Rumpff said: `Maybe selling off some product is what is needed. They will give us advice on what is the best way to get equity without diluting our shareholding.'

Broad product range

`They may also help us to look at some areas where we can divest off certain parts of the business. We have a very broad range, and some products do not necessarily need to be part of our core business.'

Rumpff said any business decision made by Baan in the US would not automatically force Baan's Asia-Pacific operation to follow suit. `Unless it is something major, I don't think it will affect the Australian operation.'

Rumpff added that the possible sale would not hinder service and support to existing Baan customers in the meantime.

Baan's announcement last week that it would hire Lazard Freres & Co to `assist in raising additional equity and evaluating the company's long-term strategic alternatives' arrived as Baan reported a $US236 million net loss for the fourth quarter of last year.

Baan lost a total of $US289 million on revenue of $635 million, and the company has had four CEOs since mid 1998.

Pierre Everaert, who took over that job on an interim basis after former CEO Mary Coleman resigned last month, said in a statement last week that Baan `continues to be in a challenging environment'.

Rumpff said that while it was possible the investment firm would advise Baan to put itself up for sale, he did not know how likely this outcome would be. `Anything can happen these days. Even successful companies can be bought.'

Aside from selling off all or part of the company, Rumpff would not speculate on other means by which Baan could raise equity.

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