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9/29/2010
11:23 PM
Bob Evans
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Global CIO: Tibco Surges And CEO Flips Off IBM, Oracle, And SAP

Tibco's revenue is surging toward $1 billion because "20th-century" competitors like IBM, Oracle, and SAP "just don't have the goods," says CEO Vivek Ranadive.

Tibco founder and CEO Vivek Ranadive has always kept his unconventional company outside of the enterprise-software mainstream, pursuing instead a range of technologies that help other companies' software work together as well as some complex products designed to turn the concept of real-time business into a reality.

But this year, in what Ranadive described in last week's earnings call as the "tipping point" that has left Tibco's business in the "pole position," the marketplace imperatives are shifting away from the traditional roster of blunt-force, transaction-oriented enterprise software products and toward the more-flexible, more-precise, and more-forward-looking tools that have begun to deliver on the massive promise of real-time business, real-time visibility, and real-time decision-making.

And in so doing, the market has also helped Tibco move from quirky outlier to mainstream innovator as vertical industries from financial services to pharmaceuticals to manufacturing, retail, healthcare and others are aggressively seeking to transform their perspective on the world from that of a backward-oriented historian to that of a forward-looking opportunist.

That shift into the sweet spot for Tibco—and Ranadive's parallel upturn in feistiness—are both substantiated by the company's financial results: for the three months ended Aug. 31, Tibco posted revenue of $184.5 million, up 23% year over year and marking the ninth consecutive quarter the company has beaten its consensus revenue estimates.

In that quarter, Tibco booked 13 deals for more than $1 million, including one for $8 million and another for more than $5 million, and the company is projecting fourth-quarter revenue of between $225 million and $230 million, which would represent a sequential quarter-to-quarter increase of about 23%.

In the transcript of Tibco's earnings call from late last week, Ranadive describes a company showing robust growth across all product segments and from a wide range of geographies, vertical markets, and sizes of companies:

"We booked new quarterly records for a non-Q4 [quarter] in license revenue, total revenue, operating profit, and EPS, while we once again broke new all-time records in services revenue and maintenance and support revenue," Ranadive said.

"We continue to see the mainstream appeal of our software platform with double-digit growth rates across each of our major regions in the Americas, Europe and Asia Pacific, plus seven different verticals contributing 5% or more of our business and a healthy mix of deals this quarter, big and small."

During the call, when an analyst asked about competition, Ranadive offered this confident assessment: "In general when we look at our competitive profile of who we see, I think 80% of the time it's IBM, 15% of the time it's Oracle, and then 5% of the time it's everyone else."

That perspective on competition turned from confident to aggressive in a phone conversation I had with Ranadive Tuesday evening. When I asked why the booming market for Tibco's event-driven software that enables real-time visibility and operations isn't attracting more players, he said, "The traditional companies are trying to come after this market but they simply don't have the goods.

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"As you know, SAP has tried for some time but hasn't figured it out, Microsoft tried but has pretty much given up, and even Cisco has been trying to move into the space by using the terms that I've come up with and the ideas that Tibco has pioneered—Cisco tried to go with 'application-oriented networks' and 'real-time' but can't make it work," the soft-spoken but increasingly defiant Ranadive said.

And when I started to mention the efforts by IBM and SAP and Oracle to deliver systems and software that can operate in real time, Ranadive jumped in, claiming that those companies—for all their size and resources and capabilities—can't make the leaps into the future that Tibco has been able to make because they are weighed down by all that mass and all that inertia:

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