Financial results report – August 2004

In June 2004, as part of its drawn out legal battle to buy PeopleSoft, Oracle revealed a shortlist of other acquisitions it has considered. Predictably Siebel and BEA were on the list, but there was one surprising entry business intelligence software vendor Business Objects – something that says a lot about how Oracle perceives its own recent performance in that sector.

No one is saying if merger talks have taken place, but the reason for Oracle’s interest is clear.

Business Objects’ financial results for the second quarter results ending 30 June were spectacular – at least on the surface. Revenues of $222.2 million were up a stunning 72% rise and net income stood at a solid $11.5 million. However, even the company admits the numbers for the current period (which include revenues from Crystal Decisions, the BI rival it bought for $1.3 billion in December 2003) are not comparable with those of a year ago (which do not include Crystal numbers).

The real guidance on how the company is doing came during a conference call with analysts when executives said that sales in Europe bounced 28% (on a like-with-like basis) $100.9 million. That was helped by deals signed with Royal &Sun Alliance, Fedex European Services and Telia Sonera.

There were also signs that Business Objects was struggling to keep costs under control following the acquisition: profits in this year’s second quarter were actually no higher than those of a year ago, despite the addition of a $80 million-a-quarter revenue stream.

Business Objects third quarter revenues are expected to be in the range of $215.0 million to $220.0 million.

While the BI vendor has had some structural issues to contend with, it has also been told some of its products have misuse technology developed and trademarked by one of its rivals – MicroStrategy. At a US court hearing in August, Business Objects was found guilty of misappropriating confidential MicroStrategy documents and told to desist from further “unethical” and “improper” behaviour. The court heard that Business Objects acquired access to significant amounts of MicroStrategy’s proprietary and confidential information, including internal email, descriptions of software architecture and sales documents.

Despite Business Objects prying into its affairs, MicroStrategy continued its revival by reporting another solid quarter. Second quarter revenues ending 30 June 2004 were $49.9 million, a rise of 14% from $43.6 million in the same period last year.

However, sales of software licences looked slightly tarnished, down 7% to $18.3 million from the second quarter 2003, although the company attributable the slippage to an unusually high $4.0 million transaction with the US Postal Service last year.

Noteworthy customer deals for the company, whose products are particularly apt for dealing with very large data sets, include Manchester Airport, which choose MicroStrategy’s business intelligence platform to analyse and report on airline performance against specific targets for different sectors, routes and even individual flights.

BI bounce

At a more specialist level of business intelligence, Hyperion Solutions, which focuses on tools and applications for corporate performance management recorded strong fourth quarter revenues to the end June of $176.4 million, up an impressive a 28% growth. Net profits were $14.7 million compared to $9.2 million in the corresponding period a year ago.

Customer deals during the quarter included BT, Telenor and Yorkshire Water Services. Hyperion also released a new version of its on-line analytical programming (OLAP) product, Essbase 7.1, claimed to be the biggest advancement in its analytical technology since the introduction of its first OLAP product back in 1994.

Further good news for Hyperion came in July when IDC released research showing that the company was the market leader in 2003 for financial and business performance management analytic applications. Hyperion commanded 20.4% of the worldwide market, three times the share of any rival.

Hyperion also announced its CEO, Jeff Rodek, was handing over the top job to his chief operating officer and president of the company, Godfrey Sullivan.

The health of the BI market was also reflected elsewhere. Sales were also up at Information Builders, the privately held vendor of Focus BI tools and iWay middleware. Product revenue for the company’s second quarter increased 15%. The company says it signed more than a dozen $1 million-plus deals I the quarter and signed 50 new-name accounts worldwide. Total revenue for the quarter grew by 7%.

CEO Gerry Cohen attributed the growth to strong market spending on BI tools especially for tools that make it easier from enterprises to deploy analysis over the Internet, intranets, and extranets.

Cohen also credited wholly owned subsidiary iWay Software as a significant contributor to the company’s growth, surpassing its previous second quarter revenue by an impressive 38%.

In the BI platforms segment, NCR‘s data warehouse division, Teradata, again turned in a solid performance. Revenues rose 10% to $331.0 million (including a 3% gain from currency fluctuations), while operating income for the quarter doubled to $60 million, giving at 18% operating profit margin.


Key supplier financial results – August 2004
Company   Main activity   Period   Period end   Revenue ($m)   Rev change   Net inc ($m)   Prev net Inc ($M)  
Advanced Micro Devices Inc Microprocessors 2Q04 27-Jun 1,261.8 96% 32.2 -140.1
Altiris Inc IT management s/w 2Q04 30-Jun 40.0 75% 3.7 3.3
Ariba Inc E-procurement s/w 3Q04 30-Jun 53.0 -6% -7.6 -3.4
BEA Systems Inc Middleware s/w 2Q05 31-Jul 262.3 7% 30.6 25.9
BMC Software Inc Data &systems mgmt s/w 1Q05 30-Jun 326.0 5% 51.8 -6.1
Borland Software Corp Application development s/w 2Q04 30-Jun 76.5 0% 2.8 -5.0
Business Objects SA Business intelligence s/w 2Q04 30-Jun 222.2 72% 11.5 11.5
Check Point Software Tech Ltd Firewall &VPN s/w 2Q04 30-Jun 126.9 20% 63.3 60.2
Citrix Systems Inc Server applns s/w 2Q04 30-Jun 178.3 25% 31.5 29.3
Computer Associates Intl Inc Systems &applns s/w 1Q05 30-Jun 860.0 9% 53.0 8.0
Computer Sciences Corp IT services 1Q05 02-Jul 3,736.4 5% 110.4 92.3
Compuware Corp Prog tools, sys mgmt &services 1Q05 30-Jun 287.1 -6% 0.6 2.6
Dell Inc PCs &PC servers 2Q04 30-Jul 11,706.0 20% 799.0 621.0
Electronic Data Systems Corp IT services 2Q04 30-Jun 5,238.0 3% 270.0 88.0
EMC Corp Storage systems 2Q04 30-Jun 1,971.2 33% 192.8 81.7
Epicor Software Corp Accounting s/w 2Q04 30-Jun 48.6 33% 5.6 1.3
Fair Isaac Corp Analytics s/w &data mgmt prods 3Q04 29-Jun 173.2 6% 28.8 30.0
FileNet Corp Content management s/w 2Q04 30-Jun 94.1 8% 2.2 1.5
Hummingbird Ltd Data analysis/content mgmt s/w 3Q04 30-Jun 56.2 17% 2.4 1.4
Hyperion Solutions Corp Analytic applns &OLAP s/w 4Q04 30-Jun 176.4 28% 14.7 9.2
IBM Corp Systems &IT services 2Q04 30-Jun 23,153.0 7% 1,988.0 1,705.0
Informatica Corp Data mgmt/integration s/w 2Q04 30-Jun 53.0 6% 1.0 3.3
Infosys Technologies Ltd S/w development services 1Q05 30-Jun 335.0 44% 83.0 58.0
Intel Corp Semiconductors 2Q04 26-Jun 8,049.0 18% 1,757.0 896.0
Intentia AB* Business application s/w 2Q04 30-Jun 99.7 -1% -1.0 -8.1
Internet Security Systems Inc Internet security s/w 2Q04 30-Jun 69.5 18% 5.5 4.9
Interwoven Inc Content mgmt s/w 2Q04 30-Jun 39.5 51% -15.6 -7.2
Macromedia Inc Interactive s/w dev tools 1Q05 30-Jun 103.6 25% 13.9 6.7
Mercury Interactive Corp Appln perf mgmt s/w 2Q04 30-Jun 159 35% 11.6 16.9
Microsoft Corp PC applns/systems s/w 4Q04 30-Jun 9,292.0 15% 2,690.0 1,483.0
MicroStrategy Inc Business intelligence s/w 2Q04 30-Jun 49.9 14% 11.4 2.3
Misys Plc* Financial sector s/w 2H04 31-May 776.1 -13% 3.4 55.4
NCR Corp Data warehousing/financial systems 2Q04 30-Jun 1,452.0 6% 122.0 -13.0
NetIQ Corp Systems management s/w 4Q04 30-Jun 67.9 -7% -6.9 -334.7
PeopleSoft Inc Business applns s/w 2Q04 30-Jun 647.3 30% 11.0 36.5
Quest Software Inc Application management s/w 2Q04 30-Jun 92.1 30% 2.6 3.1
RSA Security Inc Security s/w 2Q04 30-Jun 75.6 19% 8.0 3.2
SAP AG* Business appln s/w 2Q04 30-Jun 2,137.2 9% 298.8 262.8
SeeBeyond Technology Corp Appln/process integration s/w 2Q04 30-Jun 41.9 45% 0.9 -17.3
Siebel Systems Inc Customer relationship s/w 2Q04 30-Jun 333.3 11% 9.8 8.2
SPSS Inc Business intelligence s/w 2Q04 30-Jun 53.0 6% -1.0 0.5
Storage Technology Corp Storage systems 2Q04 25-Jun 516.6 -2% 35.6 30.1
Sun Microsystems Inc Workstations, servers, web s/w 4Q04 30-Jun 3,110.0 4% 795.0 -1,039.0
SunGard Data Systems Inc Computer services 2Q04 30-Jun 898.7 22% 102.0 89.9
Sybase Inc Database &appln dev s/w 2Q04 30-Jun 188.0 -2% 12.8 14.6
Symantec Corp Enterprise security s/w 1Q05 30-Jun 577.1 48% 131.2 58.8
Unisys Corp Systems &services 2Q04 30-Jun 1,388.1 -3% 19.4 52.5
Veritas Software Corp Data storage s/w 2Q04 30-Jun 485.0 19% 86.5 45.6
Vignette Corp Web customer s/w 2Q04 30-Jun 46.8 16% -6.2 -0.9
webMethods Inc Application integration s/w 1Q05 30-Jun 41.8 -3% -10.8 -6.8
*figures cpnverted to US$ at exhange rates averaged over the period.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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