Will TIBCO Keep Winning Against Oracle and IBM?

TIBCO Software (NASDAQ: TIBX  ) will release its quarterly report on Thursday, and investors have looked increasingly uncertain about whether the enterprise infrastructure and IT integration software maker can continue to produce solid share-price gains. Even though the company has managed to fend off much larger rivals IBM (NYSE: IBM  ) and Oracle (NYSE: ORCL  ) thus far, TIBCO has a long way to go before it can ultimately declare victory over them and the rest of its competition.

TIBCO has taken a novel approach in trying to prove to its customers that it offers better value to its customers. Rather than competing against IBM and Oracle on price, which could ultimately be a losing battle against deeper-pocketed rivals, TIBCO instead has sought to provide the highest-quality products available and then convinced its client base that those products are worth paying up for. So far, that has been an effective way to build a viable niche in the industry, but will Oracle and IBM respond with new weapons that TIBCO will have to defend against? Let's take an early look at what's been happening with TIBCO Software over the past quarter and what we're likely to see in its report.

Stats on TIBCO Software

Analyst EPS Estimate

$0.39

Change From Year-Ago EPS

(7.1%)

Revenue Estimate

$312.45 million

Change From Year-Ago Revenue

5.4%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

What's next for TIBCO earnings this quarter?
Analysts have had mixed views on TIBCO earnings in recent months, cutting their November-quarter estimates by a penny per share but boosting full-year fiscal 2014 projections by 2.5%. The stock has been relatively stagnant, losing 2% since mid-September.

TIBCO's August quarter provided some sweet revenge for the company against its rivals, with total revenue climbing more than 6%. The U.S. and Europe were key victories, with sales rising 11% and 12% respectively in those regions. In particular, CEO Vivek Ranadive pointed to improving sales execution as a key component of the company's success, with TIBCO having stopped losing sales to IBM and Oracle.

Yet in many ways, TIBCO is merely a beneficiary of providing the tools that just about every enterprise now realizes it needs in order to compete effectively. The economics of data-collecting businesses have proven themselves out, as companies with business models that seemed unsustainable only a few years ago have now started to monetize the valuable information they've been able to glean. By providing the infrastructure and tools that its customers need to realize revolutionary vision in their respective industries, TIBCO's aiming to be the facilitator of massive changes within multiple industries, all stemming from more effective use of technology.

Still, TIBCO has a long way to go. IBM and Oracle both know that the growing Asian markets will be a key component of their respective growth trajectories, and TIBCO can help customers take better advantage of opportunities in Asia in two very different ways. First, collecting data on Asian companies can help TIBCO clients improve their efforts there. But investors can also look at the success that American and other non-Asian companies have had in the region, with an eye toward emulating their best practices while adding their own innovations.

In the TIBCO earnings report, look to see whether the company continues to enjoy sales successes over IBM and Oracle. As long as TIBCO can convince investors that its products add enough value to justify paying premium prices for them, future growth should continue at least until the next transformative event in data analytics once again upends the playing field for global business.

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