Advanced Computing in the Age of AI | Friday, March 29, 2024

Improving Economy, Cloud, And Big Data Lift TIBCO 

TIBCO Software, which has evolved from providing messaging platforms to a slew of event-driven middleware to power social media and big data applications, is bracing for more growth as the economy is improving and customers realize they need its wares to build modern, scalable applications.

In the company's third quarter of fiscal 2013, which ended on September 1, TIBCO's software license sales rose by 6.2 percent to $105.2 million, and service and maintenance sales were up by the same amount to $165.7 million. Overall sales came in at $270.9 million in the quarter. Increased research, development, sales, and marketing costs ate a bit into profits, as they do from time to time at all major IT players, and that pushed down net income by 18.4 percent to $21.3 million. The quarter also included $8.9 million in restructuring costs, and if you ignore this as well as amortization, stock-based compensation, and other costs, then net income on the core business is actually up seven-tenths of a percent even with the increased spending in the areas mentioned above.

TIBCO chairman and CEO Vivek Ranadivé said on a conference call with Wall Street analysts after the company's results were announced that he was seeing the economy "generally improving" and that TIBCO was sitting at the confluence of big data, cloud, mobility, and social media and the "unassailable shift to real-time." He added that the company had a strong pipeline for the fourth quarter, and going out about 18 months, in fact.

Murray Rode, chief operating officer at the company, said that the company closed 18 deals that had $1 million or more in license revenues, up from 16 in the year-ago period. It had 140 deals with more than $100,000 in license revenues, up from 134 this time last year. The average deal size of those big deals is in the rise, too. The top ten customers drove around a quarter of sales in period, the same as in the third quarter of the prior fiscal year. Rode said that sales in the Americas region "was back to strength" in the quarter, with core infrastructure software doing particularly well.

TIBCO still sells a lot of core infrastructure software, and in the quarter this drove 43 percent of the license sales in the quarter, but was down three points. Business optimization tools accounted 46 percent with process automation making up the remaining 11 percent. The name of the game now is to sell tools that provide integration with existing applications and data sources – whether they all existing in the data center or some reside out on public clouds – and help glue together analytics and event-driven processing so companies are reacting to what they find in their big data factories. As Ranadivé put it: "Every business today is becoming a retailer. Every business wants to turn their customers into fans."

The financial services industry is still the biggest consumer of TIBCO's wares, and accounted for 24 percent of sales, compared to 10 percent for retail and life sciences companies, 9 percent for communications firms, and 8 percent for manufacturing and energy companies.

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