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TIBCO Software Inc. (NASDAQ:TIBX)

F4Q09 Earnings Call

December 22, 2009 4:30 pm ET

Executives

Vivek Y. Ranadive– Chairman of the Board & Chief Executive Officer

Murray D. Rode – Chief Operating Officer

Sydney L. Carey – Chief Financial Officer & Executive Vice President

Analysts

Tim Klasell – Thomas Weisel Partners

John Difucci – J. P. Morgan

Nabil Elsheshai – Pacific Crest Securities

Analyst for Brad Zelnick – Macquarie Research Equities

Derek Bingham – Goldman Sachs

Yun Kim – Broadpoint Capital

Analyst for David Hilal – FBR Capital Markets

Operator

Welcome to TIBCO’s fourth quarter 2009 conference call. At this time all participants are in a listen only mode. Later we will conduct a question and answer session. You can also listen to this call via the Internet at www.TIBCO.com. Today’s call is being recorded and will be available for playback from TIBCO Software’s website at www.TIBCO.com. In addition, replay will be available through Premier Global Services for one month following today’s call by dialing 888-203-1112 from the United States or 719-457-0820 internationally. The confirmation code is 4047790.

The following conference call includes forward-looking statements which represent TIBCO’s software’s outlook and guidance only as of today and which are subject to risks and uncertainties. These forward-looking statements include but are not limited to forecasts of revenues, operating margins, operating expenses, outstanding shares and earnings per share for future periods.

Our actual results could differ materially from these project in such forward-looking statements. Additional information regarding the factors that could cause actual results to differ materially are discussed in the risk factor section of TIBCO’s most recent reports on Forms 10K and 10Q filed with the Securities & Exchange Commission. TIBCO assumes no obligations to update the forward-looking statements included in this call whether as a result of new developments or otherwise.

This conference call also includes certain financial information that has not been prepared in accordance with generally accepted accounting principles as we believe such information is useful for understanding our financial condition and results of operations. For a presentation of the most directly comparable financial measures calculated in accordance with GAAP and a reconciliation of the differences between the non-GAAP and GAAP financial information, please see our website at www.TIBCO.com.

The participants on the call are Vivek Ranadive, TIBCO’s Chairman and CEO; Murray Rode, Chief Operating Officer; and Sydney Carey, Chief Financial Officer. I’ll now turn the call over to Vivek.

Vivek Y. Ranadive

On today’s call I’ll break my comments in to three parts: first, I’ll briefly review our Q4 and 2009 highlights; second, I will explain why we believe we are in a very strong position in the market; and third, I will share some thoughts on where our focus lies as we enter the new year. I will then turn it over to Murray and Sydney to discuss the details.

Q4 was another strong quarter, a record quarter and it provided a strong finish to the year for TIBCO. During Q4 we exceeded our guidance ranges for revenue and delivered our best quarter ever with $196 million in total revenue. License revenue came in at $95 million. Also this quarter we exceeded our profit targets with non-GAAP operating margins coming in at 30% and for the sixth quarter in a row we beat Street estimate consensus for non-GAAP EPS at $0.23.

For the full year 2009 highlights include total revenue of $621 million, license revenue of $247 million, record non-GAAP operating profit of $140 million for a full year operating margin of 23%, non-GAAP EPS was $0.55 17% higher than last year. Cash flows from operations was $115 million and we spent $106 million this year repurchasing 12.9 million of our shares. All-in-all it was a good year.

While others claim innovation in enterprise software is dead and focus on buying out maintenance, TIBCO continues to expand its business by bringing new and innovative products to market. Consider in the past year alone we released TIBCO ActiveSpaces, a distributed peer-to-peer in memory data grid that provides a form of virtual shared memory. We released TIBCO Silver, the industry’s first application delivery platform for enterprise cloud computing. We released tibbr, the first enterprise social networking tool that allows you to follow not just people but subjects and machines as well. And, we issued significant new releases to our world class offerings in service oriented architecture business process management and business optimization.

Whereas databases relay on architectures designed for transactions, the opportunities in today’s world depend on detecting and harnessing events. Our bus based, event driven and in memory technologies allow customers to solve a whole class of problems and pursue new opportunities that old database centric architectures simply cannot. We’re not just talking about trading floors here, these technologies have now become mainstream and TIBCO has a terrifically compelling set of offerings.

Consider a few real world examples, a western states utility is using our events and predictive software to detect transformer outages before they happen and avoid blackouts such as we experienced a few short years ago in the US northeast. A major Asian bank turned away from their existing CRM vendor and adopted our SOA and events technologies to individualize marketing campaigns and push targeted offerings via SMS. In doing so they transformed what was a largely ineffective outbound marketing effort in to a highly individualized, event driven inbound marketing machine.

A major Indian mobile carrier is using our events and BPM technology to detect customer churn before it happens and push additional account credits to subscribers after a certain number of dropped calls. Finally, a major airline is using our technology for disruption management to avoid customer service issues stemming from unscheduled events such as storms, broken equipment and flight delays. None of these would be possible with transactional architectures.

What these examples highlight is that it is actually substantially more valuable to have just a little bit of the right information, at the right place, at the right time and in the right context than having all the information in the world six months after the fact. This advantage, what I call the two second advantage is what TIBCO gives its customers and the impacts on their business and the results on the bottom line are real and substantial.

As we look to 2010, we will put even more wood behind the arrow and focus our investments on what it is that makes us unique. We’ll continue to focus on bringing innovative technologies and solutions to market and improving our sales force efficiency so as to better meet the significant market opportunity before us.

I will leave you with one last thought, when we look back on history, I believe that this past year 2009, will be considered the true start of the 21st century. We’re now living in a time when cell phones exceed landlines, laptop sales exceed desktop sales and students graduating from high school this year have grown up with their entire lives being spent on the web. Similar to these trends from the consumer space, the big shift taking place in the enterprise is this shift from transactions to events. Just as surely as the enterprise shifted from mainframes to client server models they are now shifting from those same client server models to businesses built around events.

Now, I’ll turn it over to Murray.

Murray D. Rode

I’ll focus my comments on business mix and trends and then turn it over to Sydney. From a product standpoint the breakdown of license revenue among our major product families was as follows: SOA, 60%; business optimization, 27%; and BPM, 13%. Looking at our products in more detail a few significant trends stand out, BPM license revenue increased by almost two and a half times this quarter versus Q3 and increased by 21% over last Q4 showing its strongest quarter in two years.

Our business optimization product family was down slightly year-over-year off tough comps but nearly doubled sequentially from Q3 driven by both our business events and [inaudible] by our products and our SOA product family grew by about 45% sequentially from Q3 and almost 12% year-over-year driven by our core SOA products like ActiveMatrix.

In general, we saw a strong finish to the year with strong sequential increases for our key products and we believe they have good momentum going in to 2010. We’ve been very focused on the performance of our core products both in terms of organization and go to market efforts and we believe this focus is paying off. From a vertical market perspective, total revenue in Q4 broke down as follows: financial services, 27%; telecommunications, 16%; government, 12%; energy, 9%; and life sciences, 7%. Again this quarter we showed diversified and balanced performance across a range of vertical markets.

In terms of geographic mix total revenue broke down as follows: our Europe, Middle East, Africa or EMEA division was 47%; Americas 45%; and Asia Pacific 8%. EMEA was a star this quarter rising 11% over Q4 of last year. The Americas also did well rising 3% over last year with key drivers being strength in Latin America and Canada. In the past year we have closed more than a dozen deals in Brazil alone, a sure sign we are making headway in the Latin America region.

In terms of deal activity, we continue to win new customers and maintain our pricing power. We had a healthy mix in Q4 with 19 deals over $1 million in license revenue versus 20 a year ago. We had 127 deals over $100,000 versus 135 a year ago. New license customers numbered 77 in the quarter versus 66 for Q4 of last year. The average deal size for transactions over $100,000 in license was $692,000 in line with historical ranges and up from $607,000 last year.

Lastly, I would like to echo Vivek’s sense of confidence in our business because of our products, our vertical market diversity and the fact that we are executing well. We believe that we have the ingredients necessary to be successful in 2010. With that, I’ll turn it over to Sydney.

Sydney L. Carey

I will break my comments in to three parts: first, I will provide additional details on our financial performance in Q4; next, I will provide a full year details on 2009; and then, I will provide comments on our financial outlook. I’ll review our financials on both a GAAP and non-GAAP basis. A full reconciliation was included with our press release along with an explanation of our non-GAAP measures.

Some key performance data on our fourth quarter results are as follows: total revenue was $195.6 million, up 5% year-over-year or up 2% on a constant currency basis; license revenue was $94.7 million, up 5% year-over-year or down 3% on a constant currency basis; and services revenue was $101 million, up 6% from last year and up 7% on a constant currency basis. Maintenance revenue remained strong in the period and we continued to see renewal rates range from 90% to 95%.

Also this quarter non-GAAP gross margin in Q4 was 80% up from 79% last year. Non-GAAP operating income was $58.3 million up 8% from the same period a year ago. This resulted in an operating margin of 30% versus 29% a year ago. Q4 cash flow from operations totaled $30.1 million. Non-GAAP EPS was $0.23 versus $0.23 a year ago but when you factor in the favorable benefit in our tax rate in 2008 our EPS is actually up $0.02 as compared to a year ago.

Some highlights for the full fiscal year 2009 are as follows: total revenue came in at $621.4 million, down 4% year-over-year or down 1% on a constant currency basis; license revenue came in at $247.2 million, down 10% year-over-year or 8% on a constant currency basis; we generated cash flow from operations for the year of $115.4 million; non-GAAP operating profit for the year was $140 million, 17% higher than in 2008; non-GAAP EPS was $0.55 versus $0.47 last year; and fully diluted GAAP EPS was $0.36 as compared to $0.29 last year.

Turning to our balance sheet, we ended the quarter with approximately $293 million in cash and short term investments. Deferred revenue including both long and short term components came in strong at $175 million, up 15% from Q4 of last year. DSO in the quarter came in at 71 days compared to 65 days in Q4 of last year. Also during the quarter we repurchased approximately $4.3 million shares at an average price of $9.66.

Now, for our guidance; although we have clearly seen a strengthening in our pipeline over the course of the last year, we will continue to take a conservative posture on the broader macro environment and its impact on the timing of when deals get approved and closed. We previously committed to 15% to 20% EPS growth for 2010 and we reiterate that target again today. For Q1 2010 our outlook is as follows: we expect total revenue to be in the range of $146 to $150 million; we expect license revenue to range between $49 and $52 million; the non-GAAP operating margin is expected to be between 17% and 18%; we expect non-GAAP EPS for the quarter to come in at $0.10 with an assumed tax rate of 32%; GAAP EPS should range from $0.04 to $0.05 with an assumed tax rate of 31%; and we expect cash flow from operations to range from $30 to $35 million. Our revenue outlook assumes a currency tailwind of approximately 4%.

I would wrap up by saying we like our financial position as we enter 2010. We have a strong balance sheet with a cash position of almost $300 million, a proven ability to generate healthy cash flow, strong pricing power and a continued focus on expense management and execution. With that, we’ll be happy to take your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Tim Klasell – Thomas Weisel Partners.

Tim Klasell – Thomas Weisel Partners

The first question has to do with sort of the tone of business. You guys had a really strong quarter, a nice sequential improvement off of actually a tougher compare. How much do you think was budget flushing and how much greater confidence do you have that your pipeline is just going to start to close better as we get in to the second half of the recovery?

Vivek Y. Ranadive

We feel very good Tim about how the pipeline is shaping up. We feel that people are really shifting to this event model and I’m sure that there was some budget flush as there is at the yearend but we’re feeling pretty good about our pipeline.

Tim Klasell – Thomas Weisel Partners

Then if I look at your guidance, on a year-over-year basis you’re getting back to growth and it looks like the margins are going to be up a little bit but not a ton, not as much as we’ve seen over the past few quarters. Are you shifting a little bit more to a growth mode to go after some of the opportunities and maybe we should expect more on the top line and less on the bottom line compared to the last few quarters? Then a follow up to that, what was your sales force headcount at the end of this year and how do you think that’s going to grow next year?

Vivek Y. Ranadive

We have said that we’re going to reiterate the 15% to 20% EPS growth so we believe that we continue to be focused on that number and the bottom line. But, you’re also right that we believe that one of the levers that will contribute to that is top line growth and we believe that it will be a return to that kind of growth.

Murray D. Rode

Sales headcount ended at 170.

Tim Klasell – Thomas Weisel Partners

And what’s your thinking maybe for the next couple of quarters, what should we expect?

Murray D. Rode

We still continue to believe that that total quota headcount of about 180 is where we would like to be. So, we would like to see some growth in the total headcount in the first half of the year.

Operator

Your next question comes from John Difucci – J. P. Morgan.

John Difucci – J. P. Morgan

You put up license growth for the first time in five quarters and it is fair to say I think it’s the first time you came up against an easy comp but, as Tim pointed out even when you look at the sequential growth it’s pretty much in line with sort of on average what you did a few years before last year which obviously was a different kind of year. I’m just trying to get a feel, so that implies that things certainly aren’t getting worse out there as far as the environment but it does beg the question are things getting better or are some things happening with TIBCO, and I’m sorry I seem to ask this question almost every time, but are things happening here with TIBCO?

At this point we hear a lot about the environment improving but at the same time we also hear things in the field, how things aren’t easy yet. So, if you could just sort of gage that as to what’s the difference between the environment improving here or some of the things that you’re doing within TIBCO that’s showing such improvement?

Vivek Y. Ranadive

John, we believe that there is some improvement in the environment but I think that even a bigger factor is customers are rapidly shifting to this event driven architecture. We believe that 2009 will go down as the landmark year with that shift happening and we’re seeing companies in all geographies, in all industries, in all markets even in government shifting to this way of doing things.

Our pricing power has never been stronger, our competitive positioning has never been stronger. It’s very much a [inaudible] between us and IBM and we feel really, really good about how we’re positioned vis-à-vis them. So, certainly the economic environment is better than it was but we believe that a lot of what customers are doing is buying in to the event driven model.

John Difucci – J. P. Morgan

Just a follow up to that, we’re hearing a lot more out here today in software land about appliances, the combination of the software and hardware tuned together to provide superior performance. TIBCO came out with an appliance I think about a year ago and I actually heard some good things about it in the field and as you’ve pointed out speed is very important to what TIBCO does, but we really haven’t heard a whole lot about it sense.

I mean the timing of when that product came out probably wasn’t the greatest given the macro turn to the negative but is that something that we should expect to see some improvement in going forward because it did sound like and it still does it makes sense that it’s something that could perform well going forward?

Vivek Y. Ranadive

John, I think the bigger factor that we saw was just the move to the event driven SOA model and even things like BPM came out very strong. So, we have a number of catalyst for growth and certainly reducing latency times is one of them. But, just the move to the event driven model with our core product stack – our core business was very, very strong during this time.

John Difucci – J. P. Morgan

Just quickly for Sydney, you talked about conservative macro assumptions in your guidance but you also mentioned the 15% to 20% bottom line, I just want to be clear here that guidance implies conservative macro assumptions?

Sydney L. Carey

Well again, our EPS growth guidance on the year of 15% to 20%, we do have a variety of ways of getting there. Again, with the expense controls, buy back, acquisition and revenue growth so as we get through the year we’ll be using those levers.

Vivek Y. Ranadive

But, you’re statement is correct that we’re not assuming some kind of a vastly different economic environment.

Sydney L. Carey

Right.

Operator

Your next question comes from Nabil Elsheshai – Pacific Crest Securities.

Nabil Elsheshai – Pacific Crest Securities

First on the competitive front I was wondering if you had any thoughts about IBM buying Lombardi and if that impacts you guys at all?

Vivek Y. Ranadive

Well you know IBM buying Lombardi was a very, very good thing for us because we’ve been saying for some time that BPM is a very, very big deal and there’s going to be a shift from [Silo] DRP to end-to-end BPM systems. BPM is however very, very hard to do and you don’t get it right on the first try, you have to do it for a long time and get a lot of scars. So, IBM buying Lombardi is good for us, it kind of underscores the importance of BPM and the fact that they’ve bought a bunch of companies and they’re still trying to do it. I think it’s bad news for people like ORACLE and SAP because they haven’t even gotten on that journey yet. So, from our perspective it further narrows the field to us and IBM.

Nabil Elsheshai – Pacific Crest Securities

Have you competed much with Lombardi in the field?

Vivek Y. Ranadive

We don’t really compete with them that much but Lombardi is a good company and they have some good technology. But then again, they’ve bought FileNet, ILOG, they bought other companies with overlapping technologies before so from our perspective we think it will allow us to be even more effective in competing against IBM but I think on the other hand that the other companies that IBM competes with will be hurt.

Nabil Elsheshai – Pacific Crest Securities

Then I guess if you could give a little more color on EMEA. Obviously, a good quarter there, is that something that is kind of an end of year thing or have we seen a turn in the macro there from your perspective?

Vivek Y. Ranadive

Well, I think it’s a combination of a turn in the macro but also we are really executing well over there. We just have an outstanding team there, Fabio who’s the head, [Mark Radley] who’s running the sales part of it so we have very, very strong execution in EMEA. We were only to succeed there with event driven technology so people like VeriFone and so many of these people are coming back for seconds and thirds now. We feel that it’s our execution capability that is to be credited here. Murray, do you want to add anything to that?

Murray D. Rode

No, that’s exactly what I would have said. There’s obviously some macro element but the team had just done very well in Europe this year. I don’t think it’s just Q4, I think all year long actually they’ve done well.

Nabil Elsheshai – Pacific Crest Securities

Then I guess last question given the shift that you’re talking about and not even looking at next year, if you step back and you look at a growth rate now is this a market in your core market and BPM in addition you think will get back to even high single digit or low double digit growth or how do you look at the longer term growth opportunity?

Vivek Y. Ranadive

Well, I think there’s going to be a systematic shift from transactional to event driven architectures. The thing about transactions is it’s too late to [inaudible] to the fact of something and transactions don’t pickup threats and opportunities. So, if you’re on somebody’s website looking at a mortgage calculator there is no transaction so there’s nothing that happens but when you click on it that’s an event, that’s an opportunity to go sell something to the person. So, there is a systematic shift, it’s like a change that’s taking place and we think that there will be good growth over the next five to 10 years.

Nabil Elsheshai – Pacific Crest Securities

You can’t quantify it at this point?

Vivek Y. Ranadive

Well, I think the kind of numbers you referred to are numbers that will be achieved whether it will be if you kind of look at it over a five, six, seven year time frame that’s a rate that is achievable.

Operator

Your next question comes from Analyst for Brad Zelnick – Macquarie Research Equities.

Analyst for Brad Zelnick – Macquarie Research Equities

Can you just provide an update to the integration of DataSynapse, particularly surrounding the bundling of ActiveMatrix and TIBCO Silver? Then, any insight to how much it contributed to the quarter?

Murray D. Rode

DataSynapse is actually doing well in terms of integrating to the company. We are not at this point selling a bundle of those products we’re still selling the DataSynapse products independently but we are starting to see some early positive signs of cross selling the DataSynapse technology in to the TIBCO customer base. In terms of contribution, we actually had fairly modest expectations about how DataSynapse would do in the quarter and they did better than that but still really a small contributor to the overall business.

Vivek Y. Ranadive

But, we do have high hopes for 2010.

Analyst for Brad Zelnick – Macquarie Research Equities

Then any mega deals in this quarter? And, what percentage of revenue came from the top 10 deals?

Sydney L. Carey

We had two deals over $5 million, license transactions and the top 10 contributed approximately 26% of total revenue.

Operator

Your next question comes from Derek Bingham – Goldman Sachs.

Derek Bingham – Goldman Sachs

On the levers that you have to drive that earnings growth target for next year, everyone has been kind of holding their breath this year, you’ve driven multiple points of margin growth in a very tough year. Can you talk about of the levers that you have on the operating margin front specifically what kind of margin expansion you’re looking for, for next year?

Sydney L. Carey

As revenue grows we have the thing that we should see some increases in variable costs and cost related to some discretionary spend. We are getting leverage out of the model but we continue to protect our capacity for growth and that’s also very important for us. I think you could assume that we will be getting some growth and margin expansion as we go throughout the year but at this point we’re not getting any more specific than that.

Derek Bingham – Goldman Sachs

Were there any verticals more than others that were particular surprises in the quarter in terms of how much they came back?

Vivek Y. Ranadive

What was actually a bit of a surprise to me was the breadth and depth of the interest and pipeline success that we saw. We saw it geographically, we saw it vertically, we were slow in the government sector and we really came along pretty strong in that area. It wasn’t a surprise to us that areas like telco were strong. I don’t think there were any one surprise I think it was just everything seems to be progressing right now. Is that fair Murray?

Murray D. Rode

I think a little bit we continued to surprise ourselves with how good the diversity of business is in vertical markets.

Derek Bingham – Goldman Sachs

You guys are in a really good seat to be able to get a read on how applications, kind of big applications spending is progressing. Anything you can tell us on the color you’re seeing, what your customers are doing on their app spend?

Vivek Y. Ranadive

Well our impression is that that those are more kind of in maintenance mode. They’re not looking at those ERP architectures for their new – what they’re really trying to do is things like up sell, cross sell, real time risk management. I think that, that really is in their mind the path architecture so in terms of trying to do new things and different things I think the spend is going more to the event driven side. Obviously they need to keep maintaining what they already have. Murray do you want to comment on it further?

Murray D. Rode

I think the other thing we’re seeing is a little bit of a return to more of a kind of custom development approach if anything where the big applications aren’t fast enough and flexible enough for a lot of things customers want to do.

Vivek Y. Ranadive

And that’s the great success of BPM. We’ve seen a number of situations where a customer actually went away from say an ERP CRM type implementation as in the case of the Asian bank and went through an event driven inbound marketing approach. So customers are starting to look beyond those enterprise tool technologies.

Derek Bingham – Goldman Sachs

Just one housekeeping if I could, the DataSynapse line item, could you remind me where is that manifesting? Is that in the SOA line that you considered those revenues as modest as they are?

Murray D. Rode

Yes, Derek that’s right.

Derek Bingham – Goldman Sachs

Do you expect that business to grow meaningfully different than kind of the core license profile of the business this year? Is that a faster grower or same grower?

Vivek Y. Ranadive

We think that’s a higher growth product line.

Operator

Your next question comes from Yun Kim – Broadpoint Capital.

Yun Kim – Broadpoint Capital

On the strength that you guys saw in Europe in relation to America this quarter, is this trend also reflected in your pipeline as we head in to first half?

Vivek Y. Ranadive

Well, we’re seeing a very strong pipeline across both Europe and the Americas. In the Americas we’re particularly pleased about how we’re seeing strengthen in Brazil, in Mexico, in Canada so yes, we’re seeing strength in both places.

Yun Kim – Broadpoint Capital

Do you expect Europe to be at least more or less in line with the Americas from a revenue contribution point of view in the first half or do you expect that to range more towards below the America’s level?

Murray D. Rode

First of all we’ve really only given guidance specifically for Q1 revenue and in terms of Q1 I think we only expect the mix of business to probably be in a fairly typical range where EMEA and Americas are pretty balanced. For a while now it’s actually been that way. There’s ups and downs and Europe had a particularly good year but I don’t think we’re suggesting there’s a fundamental shift in mix.

Yun Kim – Broadpoint Capital

Then a little more high level and strategic question, we hear a lot about the datacenter build outs out there which I think is still somewhat early but how much of your sales today and maybe the deals in the pipeline are driven by datacenters build outs out there?

Murray D. Rode

Well, we actually think that that is an important trend for us from a variety perspectives. We think ActiveMatrix and the SOA products in general play a very strong role there. Things like Silver even are related to that trend broadly and certainly technologies like DataSynapse.

Vivek Y. Ranadive

With ActiveMatrix and Silver we had some early and substantial wins with those that were actually a very pleasant surprise. Maybe surprise is too strong a word but it was a very good indicator of what’s to come.

Yun Kim – Broadpoint Capital

On a typical datacenter roll out is the purchase specifically done mostly upfront on a yearly basis or is it more on a perpetual basis where the customer might come back year after year?

Murray D. Rode

In either case for us there’s really no difference between those two. ELA is just the structure of perpetual license for us so we do see both varieties of sale where it can be a bigger deal upfront or it can be deals in increments over a multiyear period.

Yun Kim – Broadpoint Capital

Sydney, I just wanted to make sure the DSO was up sequentially a little bit is this simply a function of closing large deals?

Sydney L. Carey

It was just the timing of collections and revenue in the period. It’s within our range of the low 70s.

Yun Kim – Broadpoint Capital

Then also very strong sequential uptick in deferred revenue, was there anything driving that?

Sydney L. Carey

No, it was all just typical business coming in in the fourth quarter.

Operator

Your next question comes from Analyst for David Hilal – FBR Capital Markets.

Analyst for David Hilal – FBR Capital Markets

Could you talk about the strength that you saw in your analytics products? And also about how you position yourselves against the more traditional BI players?

Vivek Y. Ranadive

The traditional BI players are largely reporting systems and it goes to the two second advantage that I talk about so they allow you to analyze and mine data after the fact and what we do is we look at streaming events before and allow you to anticipate what’s going to happen as it is about to happen. Then, we also with our Spotfire product have taken the visualization of it through a whole different level. I think those are the two elements, the predictive real time nature versus the reporting after the fact nature and the visual technology that goes with it. Murray is there anything that you would add to that?

Murray D. Rode

Just that notion of visualization is a very powerful difference relative to traditional BI technologies and as you use these more elaborate and subtle kinds of visualizations it enables you to recognize patterns in data much faster than you get from traditional reporting techniques and you also start to be able to leverage that platform to effectively create analytical applications and it becomes more of a solution than a traditional BI platform.

Operator

At this time that does conclude our question and answer session. I’ll turn the conference back to Vivek for any closing remarks you may have.

Vivek Y. Ranadive

We will now conclude this call. Thank you all for joining us and happy holidays.

Operator

Thank you for joining us. We now conclude TIBCO’s Q4 2009 earnings call.

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