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Executives

Sydney Carey - Chief Financial Officer and Executive Vice President

Murray Rode - Chief Operating Officer and Executive Vice President

Vivek Ranadivé - Chairman, Chief Executive Officer and President

Analysts

Yun Kim - Gleacher & Company, Inc.

John DiFucci - JP Morgan Chase & Co

James Wood - Susquehanna Financial Group, LLLP

Tim Klasell - Stifel, Nicolaus & Co., Inc.

Nabil Elsheshai - Pacific Crest Securities, Inc.

Steven Koenig - Longbow Research LLC

Kash Rangan - BofA Merrill Lynch

TIBCO Software (TIBX) Q2 2011 Earnings Call June 23, 2011 4:30 PM ET

Operator

Good afternoon, ladies and gentlemen. I'm Shanelle. Welcome to TIBCO's Second Quarter 2011 Conference Call. [Operator Instructions] 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 InterCall for one month following today's call by dialing (800) 642-1687 from the U.S. or (706) 645-9291 internationally. The confirmation code is 72367850.

The following conference call includes forward-looking statements which represent TIBCO 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 those projected in such forward-looking statements. Additionally, information regarding the factors that could cause actual results to differ materially are discussed in the Risk Factors section of TIBCO's most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. TIBCO assumes no obligation 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 that 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 presenters on the call are Vivek Ranadivé, TIBCO's Chairman and CEO; Murray Rode, Chief Operating Officer; and Sydney Carey, Chief Financial Officer. I'd now like to turn the call over to Vivek.

Vivek Ranadivé

Thanks, Shanelle, and thank you all for joining us today. I'll begin the call with summary remarks on our second quarter performance before commenting on some of the trends we are seeing in our business, then I'll turn it over to Murray and Sydney to discuss further details.

Our business performance was very strong in Q2 and once again, we showed accelerating growth. For the second quarter, our total revenue grew by 25% over 2010 and came in at $216 million. License revenues grew by 32% to $82 million, the fastest growth we've seen in a very long time for Q2. Non-GAAP operating profit grew by 31% and operating margins expanded to 23.5%, and non-GAAP EPS, at $0.21, grew by 40% over the second quarter of last year.

The evidence that our business has hit the tipping point continues to mount, whether it is the accelerating pace of demand for our products and services, the broadening mix of business across industries and geographies, the leverage that our model has consistently shown, or the qualitative feedback I consistently hear from prospects, customers and partners. TIBCO has never been in a stronger position. The threats and opportunities of the 21st century require a software platform that is engineered from the ground up to operate in real time and to handle events, not just transactions. This after all is TIBCO's DNA. It has always been our DNA.

What good is it to find out you lost a customer after they've already left your store or to detect a security breach after personal data records are already gone, or to determine there's a power outage when your city is already in darkness? An effective systems platform for the 21st century enterprise has 5 key elements: one, it must detect relevant patterns and correlations amidst the torrent of big data and events that surround any business today, so that you can interpret what is happening at a point of sale, an instance of risk, or what I generally call the moment of truth; second, such a platform must provide powerful analytic capabilities so that anyone can interpret what is happening at that moment of truth and immediately understand the implications; three, the platform should have the muscle or automation to initiate corrective action based on recognized patterns, as well as the flexibility to compose and assemble new lightweight applications on the fly as needed; fourth, the platform should scale elastically across both on premise and cloud environments; and finally, the platform should provide a natural environment for collaboration, one that marries systems and people into a single unified desktop. Only TIBCO has a complete and integrated platform to detect, harness and make sense of the threats and opportunities that lie in events.

We are the innovator and leader in each of the major areas in which we play, across service-oriented architecture, business process management, master data management, event-driven architectures, analytic applications and social collaboration. Just as Oracle was a platform for transactions, TIBCO is the platform for events.

We're still in the very early innings of what I believe is the greatest opportunity in enterprise software. Now I'll turn it over to Murray, but before I do, I want to draw your attention to our upcoming launch party for our tibbr 3.0 release. It will be held live on Facebook at tibbr.com. We have a raft of exciting new announcements and I very much encourage you to tune in. Murray?

Murray Rode

Thanks, Vivek. With my comments, I'll provide additional operating metrics on this quarter, all of which underscore Vivek's comments on growth and the big market opportunity we have ahead of us. Starting with our license transaction numbers, we had 119 deals over $100,000 in license revenue, up from 85 such deals a year ago. For these transactions, the average deal size was $632,000, up from last quarter and about the same as last year. There were 21 deals over $1 million in license, an increase from 12 a year ago, while our top 10 customers comprised 21% of our total revenue versus 23% a year ago.

Looking at the geographic mix, total breakdown was as follows -- total revenue breakdown was as follows: America at 52%; Europe, Middle East and Africa at 38%; and Asia Pacific and Japan at 10%. Our growth was well balanced geographically, with the Americas and EMEA each up about 26% year-over-year and Asia up about 15% over last year.

From a vertical market perspective, we had our best mix ever, with 9 different verticals contributing 5% or more of our total revenue as follows: Financial Services, 24%; Telecommunications, 12%; Energy, 10%; Government, 7%; Transportation and Logistics, 7%; Retail, 6%; and Life Sciences, Manufacturing and Insurance, each at just above 5%. We saw tremendous growth in a number of these verticals, with Transportation and Logistics growing 81%, retail growing 80%, Insurance growing more than 70%, and Energy growing 64% over the same period a year ago. Also, while not yet amounting to a 5% contribution, healthcare had a nice quarter and grew more than 90% over a year ago. Overall, we continue to see greater diversification of our business across vertical markets, reinforcing how mainstream the demand for our products has become.

So turning to products, the breakdown of license revenue among our major product families was: SOA at 57%; Business Optimization, 34%; and BPM, 9%. Our Business Optimization portfolio grew by more than 65% over last year, with fairly spectacular growth coming from both Spotfire and BusinessEvents. As we've discussed for some time, analytics and events are core to the Two-Second Advantage we bring our customers, and these products are serving as strong catalysts for the rest of our middleware platform. BPM grew 9% this quarter and is up over 33% year-to-date as active-matrix BPM continues to gain momentum. SOA had a good quarter and grew 21% over last year, and this was aided in particular by standout performance in our Master Data Management business. Year-to-date, we've generated almost 1.5x all of last year's license revenue in MDM.

Overall, we see strength across a variety of products, but key growth drivers clearly include the areas of event processing, analytics, BPM and MDM or Master Data Management, all complemented by continued demand in our core messaging SOA middleware. On all dimensions, volume transaction size, vertical mix, geographic mix and product mix, our business performed well in Q2. We also continue to make important investments to capitalize on the demand for our products and services, increasing quota heads by 15 and Professional Services staffing by about 50. While we're making additional investments across our business, our primary investment focus is on continuing to grow our sales and services capacity and on our fastest-growing product areas. With that, I'll turn it over to Sydney.

Sydney Carey

Thank you, Murray. First, I will provide additional details on our financial performance in Q2, and then I will provide comments on our financial outlook for Q3. 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 second quarter results are as follows: total revenue was $216.4 million, up 25% year-on-year or 20% on a constant currency basis; license revenue was $82 million, up 32% year-over-year or 24% on a constant currency basis; services revenue was $134.4 million, up 21% from last year or 17% on a constant currency basis; non-GAAP gross margins for Q2 was 74%; non-GAAP operating income was $51 million, up $12 million or 31% from the same period a year ago. This resulted in an operating margin of 23.5% versus 22.4% a year ago. Non-GAAP EPS was $0.21 versus $0.15 a year ago.

Q2 cash flow from operations totaled $47 million despite a $17.5 million negative impact from excess tax benefits from stock-based compensation. This amount is difficult to predict, was almost double what we've seen in the past couple of quarters, and had the added effect of partially obscuring the fact that we had a good quarter for cash collection. In the period, we added $66 million to our cash balance and used $48 million to buy back stock, which resulted in an ending cash and cash equivalent of $278 million.

Moving down the balance sheet. Deferred revenue, including both long- and short-term components, totaled $227 million, up a healthy $33 million from Q2 of last year. We often see some quarter-to-quarter variability on how deferred billed, so with a strong Q2, we are expecting deferred to decrease sequentially but still be up on a year-over-year basis at the end of Q3. DSOs for Q2 came in at 71 days. Also during the quarter, we repurchased approximately 1.6 million shares at an average price of $29.17.

Looking forward to Q3, we continue to see strong demand across all geographies and are focused on both top line and earnings growth. As Murray suggested, we are continuing to invest in order to capitalize on the growth opportunity. Specifically, we ended Q2 with 222 quota reps, up from 180 a year ago, and we will continue to add quota reps and presale of headcount in the second half. We also continue to see a strong demand for our Professional Services and we'll continue to expand our Professional Services resources, both onshore and offshore with the addition of our new Hyderabad location.

Our guidance for Q3 is as follows: we expect total revenue to be in the range of $216 million to $221 million; we expect license revenue to range between $82 million and $86 million; the non-GAAP operating margin is expected to be 23% to 24%; non-GAAP EPS for the quarter should range between $0.20 and $0.21. We are assuming a 28% tax rate, however this can vary in the second half depending on the mix of foreign versus domestic profit. GAAP EPS should range from $0.11 to $0.12 with an assumed tax rate of 28%. Given the dynamics I discussed earlier, I don't believe it is useful to provide quarterly cash flow guidance. However, we remain focused on cash collection and expect DSOs to range between the mid 60s to low 70s. With that, we'll be happy to take your questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question is from the line of Kash Rangan with Merrill Lynch.

Kash Rangan - BofA Merrill Lynch

Nice to see the acceleration on the top line. I was wondering if you could give us a little bit more, Sydney, on the margin guidance. It looks like there's some investment imperatives that you're undertaking. Maybe you can just give us some more color on what is exactly happening on the operating expense side that causes you to take a little bit more conservative view on the operating margin side, not presenting the fact that the license growth continues to accelerate. Perhaps also on that point, how conservative are you being on top line assumption? We all hear about the economy, read the news. I guess I'm trying to understand how you have incorporated or may have incorporated that thinking into your forecast?

Vivek Ranadivé

Before Sydney comments on the specifics, Kash, I'll just say that we -- I know that over time we've been saying that as we approach $1 billion in revenues, our margins will head towards 30%, but we are seeing accelerating growth and so this Q2 was the fastest growth we've seen in 5, 6, 7 years. I think the last time we had this kind of growth, we were a much smaller company. So we are seeing just an absolute explosion of opportunity across the board, and so we've decided that we are going to keep investing in that capacity increase that we're going to need to meet that demand. So we're being somewhat conservative with our margin expectations based on that, and in terms of I think that what might happen to the economy and so on, we've already factored that into the guidance that we've given. But Murray, Sydney, I'll let you comment on that.

Sydney Carey

Yes, in regards to margins, we did get leverage. We expanded our operating margin by 100 basis points year-over-year. We did see our EPS grow 40%, so even with making investments, we're seeing expansion in operating margin, and as we continue to grow, we expect to see operating margins expand. But we are making investments in -- continued investment in sales, headcount and quota heads, as well as marketing programs and Professional Service staffing, so our margin guidance for Q3 just represents those investments.

Vivek Ranadivé

Yes. And another area where we've seen this absolute explosion is with our social networking platform, tibbr, where we've seen, in a couple of ones, we've seen a threefold increase in the number of qualified leads. It's taken us somewhat by surprise, and so again, we need to have the capacity to execute on all of that.

Operator

Your next question is from the line of John DiFucci with JPMorgan.

John DiFucci - JP Morgan Chase & Co

First question is for, I think Vivek and maybe Murray. It just -- it has to do -- it's really nice to see such vertical exposure here, broadening your exposure out there, and I'm just curious, are you seeing more of new customers coming in -- partly that's it, right? New customers coming in but you're also seeing some nice broadening of your exposure on your product category. Are you also seeing existing, let's say, Financial Services companies that have really at least historically focused on your flagship products? Are they starting to expand out into some of the other areas that you've been expanding out as a company when you've -- as you've been broadening your platform over the last few years?

Vivek Ranadivé

John, we're seeing all of the above, and so we're seeing a very strong interest in sectors that we really didn't have much strength in. So retail grew at over 80% year-over-year and that's just a huge opportunity for us. Every retailer wants to move this model. Places where we already have presence, we're expanding well beyond just the trading side into the retail bank side and we're expanding well beyond just the SOA platform into other areas, BusinessEvents, Spotfire, BPM. So we have never seen the strength across the board that we're seeing right now. We're seeing that in terms of our product depth, where existing customers are now coming back to buy other parts of the stack, and we're seeing that with new customers. And again, we feel that there's mounting evidence of that tipping point that we've talked about.

John DiFucci - JP Morgan Chase & Co

Well, that shows up in the numbers too, Vivek, so it's nice to see. If I might, a follow-up for Sydney. Sydney, you said you had good collections this quarter and it looks to be the case here, but at the same time, accounts receivables went up sequentially more than, at least more than I had modeled. Two things on that. I guess it -- that probably -- I would assume that had something to do with the number of large deals you did which was also very strong this quarter, which are typically sold at the end of the quarter, but also I would assume we should expect those to be collected in the following quarter. Is that the right assumption?

Sydney Carey

Yes. I mean, first we did see AR come up, but we also started to -- deferred be very strong in the period as well, and so that was more of a function of the deferred being strong. We do expect to collect any larger transactions within the next period. We haven't had a change in our business as to extending out payment terms and things like that.

Operator

Your next question is from the line of Nabil Elsheshai with Pacific Crest Securities.

Nabil Elsheshai - Pacific Crest Securities, Inc.

So you saw the core SOA stuff where you're accelerating and you highlighted MDM. I haven't heard you guys talk about that product line very much until this quarter, so did you do some -- is there something different on the product or go-to market or is it just something that has been bubbling up under the covers?

Vivek Ranadivé

Well, it's kind of interesting because we had a very different vision for Master Data Management. We believed that our approach was a 21st century approach in terms of being realtime, in terms of being a better data model, but also, we are the only company that put a stake in the ground in terms of multidomain MDM. So basically the same category of product. If you go to a retailer, they need product data, they need store data, they need shelf data, they need customer data, and by multidomain, what it means is we address all -- every domain, any number of domains. Nobody else does that. Nobody does that. So that all of a sudden has become something that has been -- become a must-have for people looking at MDM, and I believe it's gotten who's telling people that we're the only company that actually does that. So, yes, we saw -- it was kind of bubbling under the covers as you said, but all of a sudden, our phones started ringing off the hook when customers realized that this was something that they all were struggling with and they wanted to take the 21st century approach. So we're very excited about our position, and I think we believe that in every area, we are in a position now where we are not number 2 or 3, but we're number one. So we're number one with SOA, and we're number one with messaging. Our low latency messaging is by far number one. We're number one with BPM. We're number one with BusinessEvents, which we invented, the host space. We're number one with visual analytics with Spotfire, and now, we clearly are number one with MDM.

Nabil Elsheshai - Pacific Crest Securities, Inc.

Okay, great. And then you mentioned the FT -- well, I'm presuming you're referring to FTL. Is it -- it's been out a few months. What's the initial response there?

Vivek Ranadivé

It's been fantastic. The numbers speak for themselves, and so the good news about this thing is it takes you a couple of days, you run the test and you can see the latency in the nanosecond range and it blows everything away.

Nabil Elsheshai - Pacific Crest Securities, Inc.

Did that contribute at all to the strength in SOA this quarter or is that maybe a further out impact?

Vivek Ranadivé

I think it's a little further out but we're starting to see evidence of it.

Nabil Elsheshai - Pacific Crest Securities, Inc.

Okay. And then last question on -- you mentioned both Spotfire and BusinessEvents being strong in optimization. Are those kind of very different end market and drivers or is there any synergy or correlation between those 2 or are they of different dynamics?

Vivek Ranadivé

No, they actually -- what we've now done is we've actually done a really good job of tying the 2 together and also tying Spotfire with BPM, so what we're finding is that we can provide value add through having all of these facilities integrated. So you see something, you find a pattern that comes through because of Spotfire, then you activate the rules through Events and then the muscles of BPM which provide the action. So that's like a 1-2-3 punch that no one can even talk about.

Operator

Your next question is from Derrick Wood with Susquehanna.

James Wood - Susquehanna Financial Group, LLLP

I guess I have a couple of questions on that last topic. So are you actually selling multiproduct deals along with Spotfire, Events and BPM together?

Vivek Ranadivé

Yes, we're starting to do that and what we are doing for the first time is we're now starting to make Spotfire something that more and more people can sell. And so we're starting to have the core sales guys get trained and start selling Spotfire, and we're finding that there's great synergies. And so we were in an Energy customer recently and we were selling them SOA, and they saw Spotfire and they actually ended up buying Spotfire first. So we're starting to see -- we think there's going to be a lot of opportunities from doing that. It dramatically increases the capacity for the number of people that start selling Spotfire.

James Wood - Susquehanna Financial Group, LLLP

And with respect to the FTL product, do you think this new product can help reinvigorate growth and messaging on a standalone basis?

Vivek Ranadivé

Yes. We believe there's a thousand customers who are going to need FTL, a thousand existing RV customers, and FTL is -- they all will have to migrate to FTL at some point.

James Wood - Susquehanna Financial Group, LLLP

Is that an additional license fee or is that under the upgrade?

Vivek Ranadivé

No, that's a new license fee.

James Wood - Susquehanna Financial Group, LLLP

Okay. And then you guys had a very strong number of seven-figure deals. Would you say this is coming from selling more product into the installed base or are you actually getting seven-figure deals from newer customers in these newer verticals?

Vivek Ranadivé

We're seeing both, and so we're seeing some from existing customers but then we're starting to see a lot from new customers as well. Murray, do you want to add anything to that?

Murray Rode

No, I just -- I think one of the interesting things we saw with the larger deals is some of the larger deals were for a relatively small number of products and some were more platform sales, so I think I like -- I mean I like both those directions in terms of the way the deals were.

James Wood - Susquehanna Financial Group, LLLP

All right. And then lastly, it's on everybody's mind, you guys had a good quarter in Europe but there's questions about what the pipelines look like. Vivek, could you comment on that?

Vivek Ranadivé

Yes, we feel very good. We think things are really good where they sit right now.

Sydney Carey

Yes. I mean, we're seeing a pretty strong demand across all verticals and geographies at this point.

Operator

Your next question is from the line of Yun Kim with Gleacher and Company.

Yun Kim - Gleacher & Company, Inc.

Vivek and Murray, you guys have shown license revenue growth in that -- for -- in excess of 20% for the past 6 quarters and obviously 32% this quarter, and obviously your sales pipeline continues to grow at a record level. And so how aggressive do you have to be in terms of hiring just the sales capacity in line with your business momentum right now and pipeline growth? I mean, can you physically grow your sales capacity in the mid 20s on a consistent basis so that your growth is not capacity constrained?

Vivek Ranadivé

We feel that we've actually gotten a lot better at bringing on the sales capacity, and by bringing on, I mean hiring them and training them and then also doing that with services people. So I think the bigger challenge for us is not going to be in sales. I think we've gotten our arms around that. I think it's going to be in services because we're seeing absolutely explosive demand for that and we just need to catch up on that. So we're still behind the curve on services hiring, but Murray, do you want to add anything?

Murray Rode

Well, I think, the only thing I would say is that we -- as you point out that trend, we have been working on building the quota-carrying sales force even coming into this year, and the additions in this last quarter to take us up over 220 with quota heads we feel gives us still some good capacity even at this point, and as Sydney said in her comments, we'll continue to work on increasing that. I think as -- again just to reinforce what Vivek is saying, I think the bigger challenge is probably just meeting the demand around services, Professional Services.

Yun Kim - Gleacher & Company, Inc.

Okay, great. And along that line then, Sydney, do you feel -- do you expect the services margin to kind of dip a little bit in the second half of the year or do you try to accelerate hiring around there?

Sydney Carey

Well, we've seen a dip in the first half compared to last year because of the hiring and just getting people on board and the new facilities, and in Q3, I expect it to look more like Q2 and be down a little bit as we continue to staff and hire and train up the Professional Services resources.

Yun Kim - Gleacher & Company, Inc.

Okay. And then finally, you mentioned that you may not get to 30% margin for -- until you guys reach the $1 billion revenue mark, given the acceleration of your business right now which requires investment, but you guys are still committed to 15%, 20% earnings growth each year for the next 3 years, right?

Vivek Ranadivé

Absolutely, absolutely.

Operator

Your next question is from the line of Tim Klasell with Stifel Nicolaus.

Tim Klasell - Stifel, Nicolaus & Co., Inc.

Just circling back to the sales capacity, you've given us some goals over the past few years and obviously you've gotten through your 220. What's your thinking for the second half of the year? Do you have a number that you're working towards?

Sydney Carey

We're still good about our capacity where we're at right now, but we will continue to hire and we'd like to see that number come up to be between 230 and 240 by the end of the year.

Tim Klasell - Stifel, Nicolaus & Co., Inc.

Okay, great. Then just a quick guidance question. You're guiding license line up a bit into the August quarter, and if you go back over the years, that occasionally, even in good times is down just given the summer in Europe in August and all that good stuff. How are you feeling about that? Are some of the new verticals less seasonally challenged or maybe you can walk us through how you're thinking about that?

Vivek Ranadivé

Well, I think that some of our guidance is based on just the pipeline that we see and the strength that we're seeing across the board, and we're just seeing huge interest and a big pipeline and interest from geographies, different geographies, different verticals. There's new verticals like retail and government that we're starting to see a lot of strength in. So we feel pretty good. We know that a lot of people go on vacation in this quarter but we still feel that based on the evidence we have, it's good guidance.

Sydney Carey

Yes. We feel it's appropriate guidance for what we're seeing today.

Vivek Ranadivé

Yes.

Tim Klasell - Stifel, Nicolaus & Co., Inc.

Okay, okay, great. And then -- I don't want to steal too much of your upcoming thunder, but on tibbr, can you walk us through who you're selling that to when you're saying your -- the qualified pipeline is growing subsequent [ph]?

Vivek Ranadivé

Yes, well, we -- the numbers are pretty staggering, and so we already have 20 big companies that are live with tibbr, okay? And it's across the board. It's like a casino company like MGM, it's services companies, it's banks. We're just seeing strength across the board, and so we already have 20 customers that are live, and then we have a pipeline like we've never seen before. And we've gone from, like, in terms of people that are interested, we've gone from like 100 a month and a half ago to like 300 today. So we're just seeing a huge multiplier, and the beauty of this is that our enterprise sales guys can also walk it in. It's very easy. We can literally get people up and running in an hour on this, and a lot of our customers want -- don't want it in the cloud, and so a lot of products that are fairly cloud-based are basically dead on arrival when our customers look at it, and then they want the ability to look at every data source, be it from SAP, Oracle, Salesforce. We're the only company that can do that. So we think that this is going to end up being the universal inbox, universal outbox. It's going to be on every device, and we just see huge, huge opportunities for tibbr, and again, when we have our web conference, we'll talk more about it. And I believe that our people will be quite so surprised by some of the capabilities. We're already on the third version of the product, and some of the things that we've incorporated in there are truly stunning.

Tim Klasell - Stifel, Nicolaus & Co., Inc.

Okay, great, great. And where will this show up? Will this be in the SOA line? Will this be a separate product group? How should we think about it financially how it gets reported?

Vivek Ranadivé

Yes, we'll look at it as -- it'll be a small revenue base this year, but I think at some point, we'll have to start looking at just subscription-type revenue but right now, Sydney, it'll just be in BPM?

Sydney Carey

Right now, we're just reporting it as part of BPM today.

Operator

Your final question is from Steve Koenig with Longbow Research.

Steven Koenig - Longbow Research LLC

Just one or 2 quick ones here. Clearly, the Business Optimization segment is becoming a more and more important piece of your growth story, and I'm wondering on Spotfire in particular, who are you seeing most in the market? Is it the BI majors or is it more of a peer-like clique, or what does the competitive landscape look like for Spotfire?

Vivek Ranadivé

For Spotfire, it's probably -- is it clique Murray?

Murray Rode

Well, actually, we do see the BI majors quite a bit and you do see clique, so it's a combination of those 2.

Vivek Ranadivé

Well, what's interesting is that when you combine BusinessEvents in Spotfire and BPM, then nobody can speak to that, nobody, and our product is the gold standard in each of those categories. So if you look at Clickdeck [ph] and you look at Spotfire, there's absolutely no comparison. 10x out of 10, and I mean 10 out of 10x, not 9 out of 10, but 10 out of 10, we are absolutely the hands-down winner technically. We are the hands-down winner in terms of ease-of-use, ease of installation. I think where we need to rethink our strategy is we only sell it in a certain way in terms of how we charge for it, and Clickdeck's [ph] done a good job of allowing people to buy it on a credit card, then they've also got a lot of partners but in terms of product we're the gold standard in each of those categories by far.

Nabil Elsheshai - Pacific Crest Securities, Inc.

And can you contrast forming within the Business Optimization segment, when you're selling the BusinessEvents versus the Spotfire, is one typically more transaction-based Financial Services or how would you contrast, like which product you would lead with in the deals that you're selling it in to?

Vivek Ranadivé

Well, usually, we're seeing such wide adoption of BusinessEvents, and I don't think it's because Spotfire has less appeal. Spotfire probably has even more universal appeal, but BusinessEvents has already gotten out into every vertical market, so it's an easy add-on for us to throw Spotfire on top of that and show it to them. So they both have quite wide appeal, but I think it's just because we have been selling BusinessEvents more broadly, right, Murray?

Murray Rode

Yes, and I do think too that as we've said in the past, one of the nice things about having a platform that has so many entry points is that there is certainly a market where you approach customers on a Spotfire sale and that can pull along infrastructure. But I think as Vivek says, BusinessEvents has been widely deployed across a lot of verticals.

Vivek Ranadivé

And it's -- we're just having explosive growth with both products, but BusinessEvents has kind of opened the door.

Operator

At this time, I will turn it back over to Vivek for closing remarks.

Vivek Ranadivé

Okay, we'll conclude this call. Thank you all for joining us and goodbye.

Operator

Thank you for joining us. We will now conclude TIBCO's Q2 2011 Earnings Conference Call. You may now disconnect.

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