In order to succeed in increasingly competitive environments, many enterprises have sought to implement broad enterprise software applications to automate their key business processes. Historically, these enterprise software applications were costly and complex, in part because they frequently required time-consuming custom programming and implementation. Many mid-market enterprises did not have the financial resources to implement these software applications and lacked the information technology expertise and infrastructure required to continually operate, refine and maintain the software. As a result, enterprise software applications typically were marketed to large enterprises, but even these enterprises often found that the software applications cost too much and required too many information technology resources to implement and maintain.

It is believed that the enterprise software market has been undergoing a shift from large, costly and complex enterprise applications to smaller, single-vendor modular applications that can be installed quickly at lower upfront cost and demonstrate a compelling return on investment. This shift has resulted in the creation of targeted applications that are economically viable for mid-sized as well as large enterprises. Based on projections from International Data Corporation, it is estimated that the portion of the enterprise software application market will increase from $36.6 billion in 2003 to $52.6 billion by 2007.

Financial Management provides web-integrated applications that manage strategic planning, forecasting and budgeting and routine accounting transactions. Critical components include general ledger, accounts payable, accounts receivable, fixed assets, project accounting, fund accounting, draft services and currency and cash accounting.

Human Capital Management allows employers to organize employee data, administer complicated wages, salaries and benefits, pay employees and share workforce data across the enterprise.

Corporate Performance Management enables customer to plan, monitor and analyze both the financial and operational aspects of its business through customized views. CPM employs scorecarding and dashboard applications to measure execution in real time through a data warehouse that provides information from all touchpoints within the client organization.

Customer Relationship Management automates and optimizes marketing, sales, customer and partner service, quality assurance and help desks across multiple channels and languages. It is designed to launch, manage and measure flexible, multi-tiered marketing campaigns with customer segmentation, telemarketing and scripting.

Total cost of revenues was $94.4 million for the six months ended January 31, 2004 as compared to $36.1 million for the six months ended January 31, 2003, an increase of $58.3 million or 162%.

Total operating expenses were $174.5 million for the six months ended January 31, 2004 as compared to $64.0 million for the six months ended January 31, 2003, an increase of $110.5 million or 173%.

Total sales and marketing expenses were $72.1 million for the six months ended January 31, 2004 as compared to $27.6 million for the six months ended January 31, 2003, an increase of $44.5 million or 161%.

Total research and development expenses were $46.1 million for the six months ended January 31, 2004 as compared to $18.4 million for the six months ended January 31, 2003, an increase of $27.7 million or 151%.