Date: November 13, 2006

Hungarian IT firm Sense/Net targets at least 1% share of European EP market in 3-5 yrs

Hungarian software maker Sense/Net, minority owned by US-based private equity fund Primus Capital Partners LLC, is planning to gain a 1% share of the European enterprise portal (EP) market on the medium term, Marketing Director and co-founder of Sense/Net Tamás Bíró told Interfax in an interview. "Our target is to get at least 1% of the European [enterprise portal] market, which would mean revenue growth of several billions of forints," Bíró said. "We need to get resellers and references in as many countries in Europe as possible." Sense/Net, owned around 20% by Primus Capital, has developed an enterprise portal software dubbed Sense/Net Portal Engine, which the firm distributes itself and in part through a reseller network. Enterprise portals are company web sites where firms allow employees and customers to search and access and retrieve corporate information.

The global enterprise portal market is estimated to be worth about USD 1.4 bln in 2008, according to researcher Merrill Lynch.

Besides Hungarian projects, Sense/Net has already won tenders in the Netherlands and Austria, while targeting new markets in other countries of the European Union (EU) will be the main focus of sales in 2007, Bíró said. "The way to increase our market coverage is clearly to step out into foreign countries. Next year we will start [sales in the EU] on full velocity, Western Europe is the main goal," Bíró explained. "We need to reach a good exit for our investor, thus we need relatively good markets." Despite the fact that the majority of European markets are saturated, Sense/Net considers it worthwhile to enter them, because of their large size compared to the Hungarian market. "In Hungary there will not be as many multi-billion forint tenders as we would need, while our competitors are also growing," Bíró said. "[In Western Europe] there is always a niche that we can enter, including professional multi-lingual software, for example." The company expects the pace of its growth to slow down on the medium term, a trend which Bíró regards inevitable. "Growth will see some slowdown, [although] the next step is [generating revenues of] HUF 0.5-1 bln, which we are planning to reach within three-four years," Bíró said. "For this we need to widen our markets as it can be seen very well that the [Hungarian] market will stop expanding." In the medium term, Sense/Net is expecting a larger-scale investor, either financial or strategic, to acquire a stake in the company, while the chance of an initial public offering (IPO) has also been considered by management. "[The investor] could be another financial one or a strategic investor, which considers our technology worthwhile," Bíró said. "We have also considered an IPO, and the Budapest Stock Exchange is also trying to convince of making that move. [However,] a strategic investor is more probable." On the long term, Sense/Net intends to become a renowned enterprise portal company, in part by gaining a foothold in a considerable part of the European market. The company is planning to achieve the goal through strong marketing and a reinvented product-image for foreign users.

By Veronika Gulyás, Interfax

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