Queensland software provider Technology One has revealed the cost of its growing cloud business in its annual report.
Revenue from the cloud business was up from $1.4 million to $4.1 million due to an additional 49 software-as-a-service customers, which includes TAFE Queensland, Department of Education and Training, Australian Bureau of Statistics, and Department of Treasury.
Despite nearly 200 percent sales growth, the cloud business resulted in a $2.5 million loss for TechOne, making up less than two percent of TechOne’s business.
The company poured $41 million into research and development for its TechnologyOne Cloud solution in the 2015 financial year.
Executive Adrian Di Marco said the investment in TechOne’s cloud had impacted its short-term margin, but would make for a very positive contribution in the coming years.
“Our cloud business is growing rapidly,” said Di Marco. “The major uptake of cloud by new and existing customers has seen us double our cloud annual contract value, and we will continue to double this every year moving forward.”
Overall, revenue was bumped up by $23 million to $218.7 million. The biggest earner for TechOne is still annual licence fees, which accounted for $95.3 million of revenue. The company’s net profit also grew from $30.9 million to $35.7 million, an increase of 16 percent.
TechOne spent up to $32 million on three software company acquisitions in the past 12 months. This includes Gold Coast-based Icon Software for $10 million in January, Digital Mapping Solutions for up to $12 million in May and asset management firm Jeff Roorda and Associates for $10 million in October.
Di Marco said these acquisitions had already added a $1.1 million profit contribution to help compensate for the developing cloud business.
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