SOURCE: Callidus Software Inc.

June 14, 2007 07:05 ET

Research Supports Strong Growth for Global Enterprise Incentive Management Market

Independent Study Projects Market to Grow at CAGR of 30% and Exceed $1.1 Billion by 2010 -- On-Demand Purchases Expected to Grow at a CAGR of 45%

SAN JOSE, CA--(Marketwire - June 14, 2007) - Callidus Software Inc. (NASDAQ: CALD), the leader in Sales Performance Management (SPM), today announced the results of a new market sizing study conducted by Evalueserve, a global research and analytics company. Results show that the global third-party Enterprise Incentive Management (EIM) solutions market is expected to continue to grow at a CAGR of about 30%(1). Conversely, Evalueserve found the number of companies using home-grown solutions to calculate sales commissions and other incentive payments significantly decreased from 90% in 2005 to 85% in 2006. According to the study, on-demand solutions' share in the third-party EIM market increased from around 20% in 2005 to 30% in 2006 and ASP purchases are expected to grow at a CAGR of 45%. The study can be downloaded at http://www.callidussoftware.com/papers/eim-software-market.

"Our research suggests that the EIM market is poised to experience tremendous growth over the next three years," said Alok Aggarwal, Chairman of Evalueserve. "Those vendors that can capitalize on this trend and provide scalable solutions that meet customer needs for both on-premise and on-demand service models will have a competitive advantage as the category continues to gain increased market share."

In challenging economic times and faced with unprecedented competition, companies are pursuing new ways to drive revenue and optimize profitability. Enterprise Incentive Management represents one of the four core components to the broader SPM solution. The other key components include: territory and talent management, quota management, modeling and analytics. SPM is a strategic lever that drives profitable sales and maximizes business performance. Callidus' suite of EIM and SPM solutions help the world's largest companies take action to improve their sales performance strategies grow revenue and increase shareholder value.

"This study further validates the phenomenal customer traction and revenue growth our company is experiencing in this rapidly evolving market," said Robert Youngjohns, president and CEO of Callidus Software. "Companies across all industries are recognizing that homegrown compensation systems are inadequate at effectively managing the sales channel and complex commission structures. Additionally, Evalueserve's EIM market growth findings underscore our view that the broader SPM market is poised to experience strong growth. To that end, our hybrid offering with both on-demand and on-premise solutions, positions us well for continued success moving forward."

Highlights from the research of industry-specific projections show the following growth rates and opportunities for leading industries using EIM solutions:

--  25% Growth in High-Tech Industry - supported by implementation of EIM
    solutions in many companies, due to the complex distribution structures,
    compensation plans and growing sales force
--  23% Growth in Insurance Industry - EIM solutions are primarily driven
    by bonus and commission payouts, but there is also a projected increase of
    insurance sales agents through 2014 that will boost EIM expenditures
--  9% Growth in Telecom industry - resulting from increased sales force,
    retail outlets and variety of tariff plans complicating incentive payment
    management
--  6% Growth in Global Pharmaceuticals Industry - an increased need for
    EIM solutions due to emerging markets in India and China, and the growing
    number of pharmaceutical agents
    
Callidus' SPM solutions deliver a high ROI in a very short period of time by allowing sales, sales operations and finance executives to make better incentive decisions by providing timely visibility into channel operations, and giving them the flexibility to rapidly deploy new sales and distribution plans.

About Callidus Software®

Callidus Software (www.callidussoftware.com) (NASDAQ: CALD) is a leading provider of on-premise and on-demand Sales Performance Management (SPM) solutions to global companies across multiple industries. Callidus' products allow enterprises to strategically manage incentive compensation, establish quota targets, and align territories, resulting in improved sales and distribution performance. Customers/Partners include 7-Eleven, Accenture, CUNA Mutual, HP, IBM, Philips Medical Systems, Sun Microsystems and Wachovia.

Note on Forward-Looking Statements

The forward-looking statements included in this press release, including that the global third-party packaged software market for EIM solutions will grow tremendously in the next three years with a CAGR of 30% through 2010, that on-demand purchases are expected to grow at a CAGR of 45%, while license purchases are forecast to grow at a CAGR of 22% till 2010, that EIM vendors will be well positioned to take advantage of the EIM market growth, that the Evalueserve study validates Callidus' approach, that companies using Callidus' software solutions experience productivity improvements including a significant reduction of errors, redundancies and manual systems, reflect management's best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, timing and size of software license orders, management's ability to successfully implement its business plan, changes in executive management, potential material fluctuations in financial results and future growth rates, decreases in customer spending, increased competition or new entrants in the marketplace, litigation and other risks detailed in Callidus' reports filed with the Securities and Exchange Commission (SEC), including its Form 10-K and Form 10-Qs, copies of which may be obtained by contacting Callidus Software's Investor Relations department at 408-808-6577, or from the Investor Relations section of Callidus Software's website (www.callidussoftware.com). Actual results may differ materially from those presently reported. We assume no obligation to update the information contained in this release.

© 2007 Callidus Software Inc. All rights reserved. Callidus Software, the Callidus Software logo, Callidus TrueAnalytics, TrueChannel, TrueComp, TrueComp Datamart, TrueComp Grid, TrueComp Manager, TrueFoundation, TrueInformation, TrueIntegration, TruePerformance, TrueProducer, TrueQuota, TrueReferral, TrueResolution, TrueService and TrueSupport are trademarks of Callidus Software Inc. in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.

(1) The study projects growth from USD $390 million in 2006 to USD $1,112 million in 2010

Contact Information