By Eric Auchard
FRANKFURT (Reuters) - Business planning software start-up Anaplan is nipping at the heels of industry leaders SAP, Oracle and IBM, with sales of its cloud-based service tripling in each of the past three years as it seeks to shake up the market.
Customers are demanding more flexible ways to use business planning software, which crunches corporate data to allow companies to forecast growth and set performance goals.
While major players like SAP, Oracle's Hyperion business and IBM's Cognos and Applix units have been forced to offer cloud-based products, their focus has remained on packaged software as it makes up the bulk of their revenue.
This has opened the door to nimbler rivals focused solely on cloud-based software in the fast-growing market.
"There is a major shift going on and Anaplan is at the forefront," Forrester business apps analyst Paul Hamerman said. "It appears to be the fastest-growing vendor in this space and the one which already has good traction with large companies."
Anaplan is backed by cloud market leaders Salesforce and Workday, both as investors and by integrating their sales and marketing and human resource products.
The company, which was founded in a north England farmhouse in 2006, is considering a stock-market listing in the coming year, although it said its rapid growth in customers and revenue gave it room to be patient.
"We are really going after 'global 2,000' companies," Laurent Lefouet, Anaplan's managing director for Europe, Middle East and Africa said in an interview. As of January, it had signed up users at 300 companies, two-thirds of them global firms, he added.
Lefouet said Anaplan was on track to sign up 150,000 users this year, and should triple that number in 2016, putting it in reach of 1 million users by 2017 or 2018, he said. By contrast, SAP and Oracle count tens of million of cloud software users, although these numbers include a far broader set of products.
While Anaplan, now based in San Francisco, could consider an initial public offering (IPO) in the coming year, it is focused on its next milestone of signing up 1 million users, or an average of 1,000 users across 1,000 global accounts, Lefouet said.
However, business software analyst Hamerman said it was more likely that small cloud players would be bought up by bigger rivals than go public.
Traditional, non cloud-based, planning software suffers from high costs and inflexible design, while customers are "locked in" by vendors as software switching costs are high, Hamerman said. But customer demands are changing rapidly, he added.
Anaplan offers users a cloud-based service that processes billions of spreadsheet cells of corporate data on central computers, then illustrates the results in charts and graphics within a user's web browser. Its closest rivals are U.S.-based Adaptive and Host Analytics.
Industry experts say that what separates Anaplan from many of its competitors - both large and small - is the way it twins sophisticated data analysis and modeling with a relatively simple interface that allows its software to be used by managers across corporate departments, without lots of tech support.
Hamerman said the business planning market was currently worth around $3 billion in annual sales, spread across 15 to 20 players. But Anaplan said its potential audience was 20 percent of all corporate employees, a far bigger market that it said could be worth upward of $20 billion in the long run.
Business planning tools, an outgrowth of accounting systems finance teams use to manage corporate budgets, are now being used by sales and marketing teams to forecast targets, and human resources or operations to set performance goals.
Anaplan said it had recently begun to see adoption of such software by thousands of users in big corporate names such as Hewlett-Packard, Intel's McAfee unit, VMware and consumer groups Procter & Gamble, Reckitt Benckiser and Kimberly-Clark.
Anaplan and its peers decline to disclose revenue figures. But a calculation based on the 45,000 customers Anaplan says it has signed up combined with an estimated average annual subscription fee comparable to Salesforce.com's roughly $1,000, suggests revenue is nearing $50 million (45 million euros).
The Yorkshire-founded, Silicon Valley-financed and French executive-led firm has raised around $150 million to date, with its latest funding round of $100 million led by Draper Fisher Jurvetson and including Sands Capital, Brookside, Bain Capital, along with Salesforce and Workday.
(1 euro = $1.1031)
(Editing by Pravin Char)