No doubt, the enterprise marketplace is in the midst of a deadly price war. Oracle's
Yet the pricing pressure has not adversely affected Progress Software. In the third quarter, the company reported revenues of $89.3 million, which was a 15% increase from the same period a year ago. During this same period, license revenues increased 21% to $32.9 million. The company posted a 16% increase in net income to $8.5 million. It also has a strong balance sheet with about $185.4 million in cash.
Essentially, Progress Software sells products for use in mission-critical business applications. A key part of the success of technology is the ability for real-time data access, as well as integration with different software technologies.
So why is the company avoiding the problems of its competitors? Management indicated on the conference call a couple of reasons. First, the company has a powerful network of partners, which includes more than 2,000 independent software vendors. These partners, for example, can build new features into the technology to meet particular customer needs.
Next, the technology solutions from Progress Software have a relatively lower cost of ownership for its customers.
Despite the results, Wall Street is not interested; the stock price increased a hair to $20.26 yesterday and has actually dropped so far in trading today by 1.8%. But, the management of the company believes its own shares are a value. Last quarter, after all, it purchased 403,000 shares for $7.8 million.
Fool contributor Tom Taulli owns none of the shares mentioned in the article.
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