Shares in TenFold Corp, the Salt Lake City, Utah software and services company, have climbed to $23.125 – a 36% premium on the $17 at which they were sold in its IPO last week. The company, which now has a market value of $785m, claims to be the first in the industry to offer a money-back guarantee if its large-scale software applications are not delivered on time and perform as promised.
TenFold claims this is possible because its component-based architecture automates and accelerates applications development and testing. It is dependent on a relatively small number of customers in industries such as insurance, investment management, telecommunications, utilities and energy, healthcare, banking and credit.
Quoting research which shows that only 8% of applications development projects that cost between $6m and $10m succeed in being delivered on time, on budget, and according to original specifications, TenFold says it aims to become the leading provider of vertical software applications in multiple industries. Its business plan is to develop applications for customers and resell them to other companies in the same industry.
TenFold’s revenue has climbed from $3m in 1997 to $40.1m last year and in the first quarter to March 31 has risen 214% to $16m. It broke into the black last year with $1.7m in net income against a $600,000 loss the previous year. The momentum has carried through to this year with a first quarter net profit of $373,000 compared with a loss of $401,000 in the same period 12 months earlier.
The company also boasts a strategic relationship with Perot Systems Corp to develop and deliver applications and services to both companies’ clients. Perot was given the right to apply for a million TenFold shares.
