One of the top enterprise software categories is business intelligence (BI), which essentially provides tools for sifting through large amounts of data in search of the patterns that will let companies make smart, fact-based decisions about their operations. While the industry has a few major players, there are some upstarts trying to disrupt things.
One such company is Qlik Technologies (QLIK), and as proof of its success, the company was able to pull off a $112 million IPO Friday. After starting with a price range of $8.50 to $9.50, Qlik closed its deal at $10 a share.
And, so far in Friday's trading, the shares have been as high as $13.25, and just after noon, were at $12.69.
A Look at Qlik
Traditional BI software has suffered from many problems. It can take more than a year to install -- requiring highly paid consultants. Of course, there is ongoing integration. Next, the software is often complex and as a result, may not get much use (known as the "shelf-ware" problem). But for Qlik, these problems represented an opportunity to create a new kind BI company.
While it has taken over a decade to execute, the results have been quite successful. From 2005 to 2010, Qlik saw its customer base explode from 2,000 to 14,000, with names like Campbell Soup (CPB), Dannon, ING (ING), Kraft Foods (KFT) and Qualcomm (QCOM).
Qlik's offering -- which is called QlikView -- is easy to use yet powerful. For example, users can easily analyze data with a graphical point-and-click interface and customized dashboards. There is no need to be a programmer or a BI expert to make good use of the software.
What's more, Qlik uses in-memory technology that leverages 64-bit computers, which reduces the need for physical storage and also allows for increased performance -- crucial when analyzing large amounts of data.
From Private to Public to ... Buyout?
Qlik's financials have been particularly strong. Revenues have soared from $80.6 million in 2007 to $157.4 million in 2009. In the first quarter of 2010, revenues spiked 66% to $43.8 million and operating income was $2 million.
Meanwhile, analysts at IDC estimate that the BI market is going to reach about $8.6 billion in 2010, so there is much more room for Qlik to expand.
The BI market has also seen much consolidation over the past few years. In 2007, Oracle (ORCL) purchased Hyperion Solutions. Then a year later, IBM (IBM) acquired Cognos and SAP (SAP) picked-up Business Objects.
In light of this, Qlik's success is certainly likely to get the attention of these software biggies. And the result may be that the company won't stay public for long.
Managing your Portfolio
Keeping your portfolio and financial life fit!View Course »