Oct 24

Aspen Tech financial results

Category: Technology

Aspen Tech, a leader in making software for the process industries, announced its financial results for the first fiscal quarter of 2010. Earnings were stronger than analysts expected. The company has relied on a subscription based model, similar to the one used by online games such as Everquest and World of Warcraft. A spokesperson for the company announced that Aspen Tech expected to see high single digit or double digit growth during fiscal year 2011.

Subscription models have been risky for software not related to the online gaming industry. The developers of the AspenOne suite have developed a model that lets businesses control cost by subscribing to a certain set of services in the product. Companies purchase ‘tokens’ which give them the rights to use the software for a set period of time. 

Microsoft has suggested a similar model for its Windows operating system and Word products, but faces stiff competition from free competitors, such as Linux and the popular OpenOffice suite, developed by Sun Microsystems. 

Aspen Tech’s subscription revenue increased from 4 million dollars to nearly six million dollars in the year since they changed from a more traditional business model to the subscription business. Aspen Tech focuses on the process industries, primarily oil, coal and natural gas.

According to one company spokesperson, the first quarter of each fiscal year is usually slower than the other quarters. Unexpected growth is both good news for the company itself and a sign that the process sector of the economy is starting to recover, even if other important sectors still are economically troubled.

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