Last night, TIBCO Software (NASDAQ:TIBX), maker of enterprise management software and an early bird in the service-oriented architecture (SOA) market, reported earnings for the third quarter of 2006, just about level with expectations across the board. In the ensuing conference call, management talked about an impressive slate of large orders, pointing to increased demand for its nontraditional approach to business software.
Management kept coming back to the 11 contracts worth more than $1 million each that were signed in the quarter, several of which were closer to $5 million. The customer list includes Comcast (NASDAQ:CMCSA), Con-way Inc. (NYSE:CNW), Alaska Air (NYSE:ALK), and the State of Texas. Some of these were renewals or upgrades of existing contracts, but TIBCO also added 57 new customers this quarter.
In response to an analyst question on why customers should choose TIBCO software over competing products from the likes of BEA Systems (NASDAQ:BEAS) or IBM (NYSE:IBM), CEO Vivek Ranadive described a sales meeting with an unnamed European airline -- an IBM shop today -- that handed specifications to the competing software providers and then locked them in separate rooms to work up some semblance of a usable system. A couple of hours later, TIBCO had a working solution, while IBM never completed the task. TIBCO feels pretty good about its chances to land this contract in the near future.
To be sure, moving to SOA software requires a few changes. Ranadive described SOA as "not a one-shot installation, but more of a mind-set, a way of life." You need to retrain your technical and financial staff to a whole new approach to how business data moves through the system, or else start over with new hires. For that reason, TIBCO doesn't expect an overnight revolution, but more of a long-term evolution. If you buy into the same vision and have a long-term investing horizon, TIBCO could serve you well.
Further Foolishness:
- See if TIBCO met this Fool's expectations.
- Read up on the SOA controversy between two of the current market leaders.
- 5 top stocks you don't know about.
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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like. Foolish disclosure is well-rounded in and of itself.
