Intelligent Enterprise

At a time when many software companies are grappling with lower revenues, MicroStrategy, a pure-play business intelligence software vendor, reports that its product license revenues are up 39% compared with last year. MicroStrategy's strong report is further proof that BI applications remain critical for businesses, especially during tough economic times.

MicroStrategy reported Thursday evening that revenues were up 15% to $104 million for its third quarter ended Sept. 30. Yet in particularly strong contrast to what's happening with the broader software industry, its product license revenues were up 39% to $34.4 million. During the recession, many software companies have depended heavily on revenues coming from software maintenance and service fees, since companies are spending less on license purchases.

MicroStrategy's net income was $21.4 million, up 92% from the third quarter of 2008. As of 10:50 a.m. EST Friday, the company's stock was up 19% to about $87.

As part of its report, MicroStrategy cited examples of new business. Grange Insurance will expand its use of MicroStrategy to automate report distribution and notify adjusters with information that should help reduce claim cycle time.

Networking company NTT America has expanded deployment of MicroStrategy to help managers improve budget allocations and better utilize resources. Retailer Tesco Group, with 4,226 stores, will use MicroStrategy for head-office analytics and in-store dashboards.

Worldwide sales of BI software grew 22% in 2008 to $8.8 billion, according to Gartner, with SAP/Business Objects, SAS Institute, Oracle, IBM/Cognos, Microsoft, and MicroStrategy owning 75% of the market. By comparison, the market for worldwide BI software grew only 13% between 2007 and 2008. At an Oct. 20 conference, Gartner ranked advanced analytics as No. 2 on its Top 10 list of the most strategic technology areas for 2010.

IBM, which had its BI conference earlier this week, plans to invest and grow its BI business. "We've seen unprecedented interest in the area of analytics," said Rob Ashe, GM of analytics and performance management at IBM, in an interview.

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