New Site May Mean New Home for Baan

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New Site May Mean New Home for Baan

By Bob Starzynski
Staff Writer

The 281-acre campus that Baan Real Estate bought in Loudoun County, Va., last month may become the corporate headquarters for the Baan Co., one of the largest software companies in the world.

Marvin Newell, chief operating officer of the company's Americas division, said that his division will definitely move its headquarters to the new location, several miles from Washington Dulles International Airport. In addition, he said, the company could consolidate its dual headquarters from Putten, Netherlands, and Menlo Park, Calif., into one central headquarters at the Virginia site.

"Those discussions are currently in progress," Newell told Washington Technology. "It will be a matter of weeks before a decision is made."

Originally, the company gave no indication that a move may take place with the new land purchase.

Regardless, having the Baan Co. in Northern Virginia would be a big boost to the Washington area's reputation as a technology center. Currently, the region's largest software company is Intersolv Inc. in Rockville, Md., whose revenue grew 10 percent to $160 million last year.

Baan had sales of $464 million through the first nine months of this year and is growing at about 70 percent a year. Conservative Wall Street estimates put Baan at over $600 million by year's end.

"They are one of four major players in their space, and they have a great track record," said Bert Hochfeld, an analyst with Josephthal Lyon & Ross in New York.

The other major players in the market are SAP A.G. of Germany, Oracle Corp. of Redwood Shores, Calif., and PeopleSoft Inc. of Pleasanton, Calif., according to Hochfeld.

All four companies sell enterprise resource planning software to large corporations. Their products help companies keep smooth manufacturing and management flows.

Baan, which trades publicly on the Nasdaq National Market and the Amsterdam Stock Exchange, keeps a global focus. Forty percent of its business is in the Americas and 40 percent is in Europe. The rest is scattered. And, like most software companies, the company's employees are spread around the world. The only employees that are centrally located in main offices are corporate officers, administrators, and research and development teams. Newell estimated that the company has 3,500 to 4,000 employees.


Baan photo

- Marvin Newell, chief operating officer of Baan's Americas division

But Baan is not new to the Washington market. It already has 100 employees in a Reston, Va., office that opened four years ago.

The new campus, which will be developed over the next five years, will eventually house 1,000 employees and students. In addition to the corporate offices for the software company, Baan Real Estate is using the land for an educational institution as well as offices for Baan Investment, the parent of the real estate business. Employees will start occupying offices on the campus in about six months. The company's grand plan eventually calls for 2.5 million square feet of office and training space.

Even if the software company does not move its headquarters to Virginia, the Americas division still will be housed there, Newell said. Considering the health of the Northern Virginia economy, the technology talent pool in the region and the geographic proximity to major markets, Newell gives the corporate relocation good chances.

Baan has focused almost exclusively on the commercial market to date. The company has not targeted the federal or other government markets. Newell said that the proximity to the federal government is not a factor for the company in deciding on a location.

"We target manufacturing companies, not the government," he said. "But that is not to say we won't go after that market in the future."

New markets may become a necessity for Baan in the future, said Hochfeld. Over the past two years, Baan has gained a lot of market share in the enterprise resource planning field. Hochfeld believes that the company will meet increasing competition and that in the current market Baan's growth will slow.

Newell dismisses the idea of slowed growth. "We've been growing extremely quickly and that should continue."

Largest Enterprise Resource Planning Software Companies
Company Headquarters Market Employees Revenue Net income
(from most recent nine months)
Oracle Corp. Redwood Shores, Calif. Nasdaq National Market 29,431 $4.7 billion $549.8 million
SAP A.G. Walldorf, Germany Frankfurt Stock Exchange 11,998 $2.2 billion $472 million*
PeopleSoft Inc. Pleasanton, Calif. Nasdaq National Market 2,490 $555.2 million $69 million
Baan Co. Putten, Netherlands, and Menlo Park, Calif. Nasdaq National Market
Amsterdam Stock Exchange
3,500 to 4,000 $443.2 million $47 million
* Pretax profit (net income figure not available)

Source: Company releases


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