GK Software is serious in the strategically important US market: the beginning of the year won the first project in the United States specializing in the retail software company, a few days before the acquisition of the business segment “Retail” US-based DBS Data Business Systems Inc. followed (DBS). In addition, recent international project completions that the partnership with SAP is now bearing its fruit. Analysts at Warburg Research see the fair value of the GK share at 50 euros.
THE SHAREHOLDERS spoke with GK-founder and CEO Rainer Gläß about the importance of the US market, working with SAP and the dissatisfaction among shareholders.
THE SHAREHOLDERS: Mr. Gläß, GK Software has recently reported that you acquire a company in the USA. What purpose does the acquisition and what will help them to further advance the internationalization in North America?
Rainer Gläß: The past few years have shown us that our solution is competitive in the world’s largest retail market in the world. Together with the sales force of SAP actively for over a year selling our solutions in this market, we were able to increase the visibility of software GK clearly and already won the first projects in North America. With the acquisition of the retail segment of the DBS Inc., we show potential customers in this market, we also have an experienced and sufficiently large team to implement projects on the ground. We thus strengthening mainly in two directions: in project implementation and on the other hand, we are expanding our market access, as DBS has strong customer relationships in the retail sector for many years. The bottom line is we want from the acquisition a significant acceleration of growth in North America.
The DBS also has own software solutions for retail businesses. The extent to complement its solution world?
The DBS solutions are complementary to our existing range. DBS has introduced the branch solution of Triversity, which later was acquired by SAP American customers for many years. In this connection, special solution modules to complement this range have been developed. For us, of particular interest, especially the module to connect American EFT operator – EFT stands for Electronic Fund Transfer and means the payment by debit or credit cards. This solution can be easily connected to our store solution and will reduce time and effort in the implementation of projects. Developed by DBS solutions are therefore no competitive products, but expanding our range very well.
end of last year could You win another project in the US and Canada. In this project, you will be equipped in the branches of a North American dealer around 500 systems developed by the GK Software and marketed by SAP SAP POS Software Point-of-Sale by GK. What is the importance of this project for GK?
As already mentioned, is the North American market for our future growth of very important – that’s why we are moving with great strides to North America. To illustrate the dimension of this market, one only has to keep in mind that there alone in the Christmas season sales is achieved, corresponding to the total retail sales in Germany. And Germany is the largest retail market in Europe! With this project we therefore provide a further important reference for our solutions and show that we can successfully sell together with SAP in North America. In retail, it is like any other business – nothing convinces potential customers more sustainable than good references. Therefore, the signaling effect of this project is of great importance. In the overall context of the other projects that we have won over North America – especially at Loblaw course, one of the largest retailers in the world – we creating for ourselves an ever increasing reference base, build trust and show our strength in implementation projects. This was also a very important factor for our success in Europe.
What are your expectations for the US market medium term?
The growth of GK software depends on that we one or more major projects each year the corresponding license sales gain. The last years have shown us that the market for German speaking has limited capacity. If still uncertainty in the decision-added by the challenges Omni-Channel Retailing and therefore projects are pushed, we are braked to achieve our growth objectives. In the North American market, the number of large and medium-sized projects is much higher, so that we see here an important market for our future growth. We were able to win in the last two years, the first three projects here. But I am convinced that we can significantly increase by intensified cooperation with SAP and the US acquisition our strike rate in the coming years.
In the past year have you been in South Africa win the first project in which the old SAP POS solution for SAP Point-of-Sale by GK is migrated. What does this add to the customer? Is your relationship with SAP thus arrived at a new level?
The branch solution, and not just the cash belongs to the commercially absolutely mission-critical IT components. At the point-of-sale success or failure of a retailer decide. As a result, these solutions are used for many years and be replaced only after careful consideration. For customers of the old SAP POS solution, it is therefore a great advantage if them a clearly defined migration path is shown in the new world. In addition, they offer SAP Point-of-Sale by GK GK and the other solutions in the SAP portfolio entirely new ways to organize the branch business more efficiently and cost effectively. With the acquisition of the retail segment of DBS yet is added as a further aspect that we attract qualified employees to both the old and the new world and most importantly, the customers and their processes already know very well.
Basically was in 2014 marked by internationalization. GK has won in South Africa and North America, five new customers. How satisfied are you with the successes abroad and what other markets you have 2015 aiming at?
have course we can be very happy to win us these projects. They show that we are internationally competitive with SAP can achieve success in regions in which we could only advance much more difficult. The South African market is z. B. very closely linked to the large and developed retail markets and radiates back into this. Our main target markets in 2015 remain Europe and North America, as they have for us at present the greatest potential. However, there are also opportunities in other regions, such as South America and the Middle East, we work together with SAP.
Evaluate the recent sales success in South Africa and the United States as proof that the cooperation with SAP now bears its fruit? Have your expectations to the cooperation fulfilled so far?
Not only show these successes that the strategic decision to cooperation with SAP was right. We have since 2009 together 17 projects – including some very large – won, are venturing into new regions and have established ourselves as one of the most important players in our market worldwide. My expectations were therefore more than satisfied. However, I believe that we are still in its infancy, as the joint potential in the international arena is huge. Our Since last year, well-established partner eco-system, we are prepared to continue to successfully move forward here.
How do you assess the situation in the domestic market and in Europe in general? Click here to see even greater growth potential for GK or focus in new business now rather on other continents?
Notwithstanding the importance of North America to our growth strategy, I am convinced that it is precisely our home markets in Europe will contribute in the years to come again much more to our growth. If, like me, is active in this field for over 20 years, we know that there is never a continuous flow of new projects. Several weaker years always follow back stronger. There are signs that the latter is now again be the case. The view around the requirements of Omni-channel retailing is becoming sharper and subsequently will fall longer-delayed investment decisions. Therefore, the European market is going to stay for us is of high importance
Let us look at your product pipeline. GK applicable in his field as a technology leader. What technological innovations you want to keep your competitive edge in the coming years?
We always have the GK Software have been entitled to be technologically and functionally leader. If you do not constantly evolving its solutions in our business and in part also reinvents one can lose the connection. A few weeks ago we have therefore shown on the fairs in New York and Dusseldorf new versions of our solution world that meet these requirements. Of course, the issue of Omni-Channel in mind. We are convinced that there will be future integrated solutions that provide the store, the web shop or mobile device key processes as services. This complexity is reduced and prevents redundancy. Such services we already offer now and have already productive use.
What role does the topic of cloud in your portfolio?
The topic of Cloud Wins in our product environment is becoming increasingly important. For the foreseeable future it will certainly go in the trade to the private cloud, for which we already have the solutions. Wherever it is possible business logic and databases from one of our stores are largely migrate to the cloud in which they are to operate more cost-effective and safer. We have the answers and are sure to be positioned here before the competition.
We come finally to the GK share to speak: From the initial euphoria after the introduction of the SAP nothing is felt in the past year, the GK-shares lost 30 percent of its value. Can you understand the dissatisfaction on the investor side?
We are aware that the news flow was less pronounced in 2014 than we would have liked. This has a rare according to experience positive effect on the stock price. However, we have a very stable base of institutional investors, who accompanied us to the part for many years and does not see us as a short-term investment. The dissatisfaction of investors as a shareholder I can just understand, of course. However, I believe more than ever for sustainable and profitable growth of GK Software. Especially with the view of 2015 I see here on the right track.
Mr Gläß, thank you for the interview.
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