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If you don't know what Tibco Software (Nasdaq: TIBX ) does, it's probably time to get to know the company. After a stellar earnings report, Tibco's stock is beating the market senseless today and exploring multi-year highs. I think that's just the beginning.
The enterprise software builder saw second-quarter sales jump 21% year over year to $173 million, while earnings took a 27% leap to $0.08 per share. Tibco's sales have accelerated recently, each of the last three quarters showing stronger growth than the period before it. That trend dovetails nicely with what CEO Vivek Ranadive calls a "tipping point" somewhere in the last year.
The theory is that IT managers and CIOs are coming around to Tibco's world view, where the event-driven information bus often delivers the right data at the right time. Traditional database-oriented information flows might give you more data, but the bus delivers it faster. That "two-second advantage" can make or break a business decision or customer interaction.
Industry trends also seem to support this hypothesis: Chief rivals IBM (NYSE: IBM ) , Oracle (Nasdaq: ORCL ) , and SAP (NYSE: SAP ) have all started dabbling in event-driven architectures, thus raising the awareness level of the new thinking. Tibco's strategy is to interface easily with other vendors' information systems or even homegrown, custom-built applications, leading to contracts where Tibco provides one or more crucial parts of a company's business intelligence workflow, but SAP and others supply the rest. It's a flexible strategy that often lets Tibco come across as a white knight, saving businesses from a quagmire of thrown-together IT infrastructures.
It's one thing to have technology service planners Accenture (NYSE: ACN ) and Infosys (Nasdaq: INFY ) installing Tibco products in a heterogeneous business environment, but Tibco is also seeing support from places you might not expect. One of Tibco's largest deals in this quarter happened when head-to-head rival IBM's services division pulled Tibco into a contract it was designing. It's nice to have friends, you know.
Tibco is profitable and cash-flow positive, positioned on the bleeding edge of a product category that every serious business needs to use. If one of the big boys doesn't buy the entire company before it gets too expensive, I see several years of stand-alone business growth ahead for Tibco.