MicroStrategy License Revenue Declines 12% - InformationWeek
Healthcare // Analytics
05:10 PM

MicroStrategy License Revenue Declines 12%

The recent release of MicroStrategy 9 could help the business intelligence software company reverse the decline.

MicroStrategy's net income declined 19% to $14.3 million for its fourth fiscal quarter compared with the same quarter last year, the company announced Monday. But perhaps a bigger problem is that its business intelligence software license revenue dropped 12% to $28 million.

There are temporary factors that could have caused MicroStrategy's license revenue to decline in the fourth quarter. Many customers may have been holding back on spending in anticipation of a major software upgrade, MicroStrategy 9, which is scheduled to ship this quarter. And, like other software companies, an overall spending pullback caused by the shattered economy could have hurt license revenue at MicroStrategy.

But MicroStrategy also could have been impacted by one large, irreversible factor: consolidation of the business intelligence software industry.

MicroStrategy is one of the few remaining independent BI vendors of significant size, and its financial report could show some indication of what's happening in the independent BI market. (Many independent BI vendors, including SAS Institute, are privately owned and do not release financial results.)

IBM Cognos, SAP Business Objects, and Oracle, which acquired Hyperion and others, pose the biggest threat to the independents, since their sales pitch is to provide businesses with a one-stop shopping experience for enterprise and BI software.

MicroStrategy's total fourth-quarter revenue was down less than 1% to $95 million, thanks to growth in revenue for product support and other services, which made up $67 million of those total revenues. Allstate Insurance, GlaxoSmithKline, Lowe's, Netflix, Payless ShoeSource, and Wells Fargo Bank were among the dozens of new and existing customers that signed new deals in the quarter, the company reported.

Indeed, MicroStrategy grew revenue for the full year despite competitive efforts by the big three software companies. Product licenses edged up 5% to $100.3 million, and total revenue increased 7% to $335.4 million.

The upcoming release of MicroStrategy 9 could prove to be a revenue boost this year. Mark LaRow, VP of products, in a recent interview called it the company's most significant release in four years.

Improvements include in-memory processing technology that results in faster responses to queries, as it limits trips to data sources. MicroStrategy 9 also lets users access data in any relational database of any size. Previously, users were limited to one data source per project.

The multisource capability will help make MicroStrategy more usable by smaller departments within a company, LaRow said. "Departments don't have big databases and data centers, and they need a lot of technology flexibility on the data side," he said.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
Digital Transformation Myths & Truths
Transformation is on every IT organization's to-do list, but effectively transforming IT means a major shift in technology as well as business models and culture. In this IT Trend Report, we examine some of the misconceptions of digital transformation and look at steps you can take to succeed technically and culturally.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll