Software companies floundered right and left in the most recent quarter. Not the reporting and analytics firms.
Software firms large and small slipped in the second quarter with soft earnings reports, sparking concern about overall technology spending. With most quarterly results now in, it looks like only one category of software came in at or above projections, across the board: the reporting and analytics vendors.
Business Objects, Cognos, Hyperion and MicroStrategy all managed to post strong quarters during the now-fading reporting period, in an environment where some enterprise software companies stumbled badly and almost all software verticals had unexpected losers among their ranks. PeopleSoft, Siebel and Veritas were among the big names that disappointed the Street in recent weeks.
Other software categories whose technologies are often core components of business intelligence also fared less evenly than the companies on the front end. Among data-integration software makers, for instance, Ascential almost doubled its earnings amid a sales leap of 62%. But rival Informatica reported earnings that fell by more than two-thirds and managed to garner only a 5% increase in sales.
Strength among the analytics and reporting firms provides more anecdotal evidence to support what now seems to be a very powerful trend among users: Consolidation of reporting applications. The larger front-end players, in particular, seem to be benefiting from the trend as businesses choose one of the more well-established technologies and make it their de facto standard.
CMP's TechWeb Network, of which Business Intelligence Pipeline is part, surveyed more than 1,000 technology and business professionals on the state of IT in June and July, and our findings indicate that the BI firms can expect more success for the remainder of the year. Business intelligence ranked as the highest current IT priority for 36.3% of companies with 1,000 or more employees. Only one other technology category -- Web services -- ranked as the highest priority among a larger percentage of firms.
Meanwhile, the BI vendors are hedging their bets, at least a little, for the remainder of the year. Business Objects, in particular, reduced its third-quarter outlook when it reported results Wednesday. But for now at least, the BI front end refuses to stumble.
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