Company results

BI license fees are flat or declining in real terms — growth is coming from performance management applications

 Business Objects’ disappointing September 2007 quarter was again flattered by the weakness of the US dollar, and the inclusion of more acquisitions, this time including Cartesis. Quarterly revenues increased by 18.9 percent (15 percent in constant currencies) to $367m, license fees grew by 5.6 percent (two percent in constant currencies) to $139m and net income fell by 67.5 percent to $6.4m. For the last 12 months, revenues were up 21 percent to $1.44bn, license fees were up 12.9 percent to $605m and net income fell 7.7 percent to 69m. All our historic figures include Crystal Decisions data, but not those of the numerous other recent smaller acquisitions such as Cartesis and Inxight.

On the day that SAP announced that it was acquiring Business Objects, the latter issued a profits warning, citing weak license fees in Q3 2007.

 Cognos’ quarter ending August 2007 showed slightly improved growth, which was enough to push its revenues over $1bn for the first time ever. Quarterly revenue grew by 9.8 percent to $252.4, license fees grew by 11.6 percent to $87m and net income grew by 11.7 percent to $25.5m. For the 12 months to April 2007, revenues grew by 12 percent to $1.02bn, license fees grew by 12.2 percent to $387.2m and net income grew by 14.3 percent to $126.3m. Cognos noted that the weakness of the US $ compared to the Canadian $ was squeezing its earnings.

 MicroStrategy quarterly revenues in the September 2007 quarter were up 23.5 percent to $95.8m, license fees rose by 23.3 percent to $30.2m and net income grew by 13.9 percent to $19.3m. The income from operations was $28.6m, up 20.7 percent. For the last 12 months, revenues were $345.6m, up 15.7 percent, license fees were $105.2m, up 3.2 percent, net income was down 6.3 percent to $63.2m and income from operations was down 3.6 percent to 93.6m.

Recently departed:

Applix again grew strongly in the quarter ending June 2007, including the fourth full quarter’s contribution from Temtec, acquired in mid June 2006. Revenues grew by 30.9 percent to $17.44m, license fees grew by 15 percent to $9.4m and net income fell by 8.5 percent to $2.1 m. Annual revenues grew 45 percent to $61.2m, license fees by 43.9 percent to $34m and net income grew 46 percent to $10m.

 Hyperion Solutions, in its final complete independent quarter, had improved growth in the last quarter of 2006. The quarterly revenue was $222.9m, up 20.2 percent, license fees $84.9m, up 14 percent and net income $21.5m, up 38.7 percent. Revenues for the past 12 months were $831m, up 15.1 percent, license fees $313m, up 10.9 percent, and net income slightly down by almost one percent to $67.7m.

Long departed

There were once many more independent public OLAP vendors than remain today. There have been no BI IPOs in this century, and a number of once-independent companies have been acquired (some more than once). Among the many once-public companies to have been acquired or gone out of business are: Brio Software, Comshare, Frango, Gentia, Hyperion Software (previously IMRS), Information Advantage, IQ Software, MIS and Sagent. Dozens of other private companies have also been acquired rather than going public. Some of these consolidations are listed here. Hyperion Solutions and Applix have now joined this list of once-public BI vendors, and Business Objects is expected to do so during Q1 2008.

License fees are one of the best measures of the health of a software company, and the chart shows that the public BI specialists have had very different trends over the last few years.

• The latest Business Objects and Cognos figures include the contributions from the former Acta and Adaytum + Frango products, whereas the pre-2003 historical figures do not. This means that the organic growths of both companies were lower than indicated in the chart.

• The Business Objects figures include Crystal and the Hyperion figures include Brio; the Applix figures exclude the discontinued CRM business and Temtec.

• The calendar quarterly figures for Cognos are obtained by interpolating Cognos fiscal quarters which end in Feb, May, etc. Cognos figures incorporate Adaytum from mid-January 2003.