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TIBCO Software, Inc. (NASDAQ:TIBX)

F4Q07 (Qtr End 11/30/07) EarningsCall

December 20, 2007 4:30 pm ET

Executives

Vivek Ranadivé - Chairman and CEO

Murray Rode - EVP and CFO

Analysts

Alan Cooke - Merrill Lynch

Tim Klasell - Thomas Weisel

John Walsh - Citi

Bryan McGrath - Credit Suisse

Sterling Auty - J.P. Morgan

John DiFucci - Bear Stearns

Derek Bingham - Goldman Sachs

Brandon Chan - Piper Jaffray

Raghavan Sarathy - Ferris, Baker Watts

Operator

Welcome to TIBCO's fourth quarter2007 conference call.

The following conference callincludes forward-looking statements, which represent TIBCO Software's outlookand guidance only as of today, and which are subject to risks anduncertainties. These forward-looking statements include but are not limited toforecast of revenues, operating margins, operating expenses, outstanding sharesand earnings per share for future periods.

Our actual results could differmaterially from those projected in such forward-looking statements. Additionalinformation regarding the factors that could cause actual results to differmaterially are discussed in the Risks Factors section of TIBCO's most recentreports on Forms 10-K and 10-Q filed with the Securities and ExchangeCommission. TIBCO assumes no obligation to update the forward-lookingstatements included in this call, whether as a result of new developments orotherwise.

This conference call alsoincludes certain financial information that has not been prepared in accordancewith Generally Accepted Accounting Principles as we believe that suchinformation is useful for understanding our financial condition and results ofoperations. For a presentation of the most directly comparable financialmeasures calculated in accordance with GAAP and reconciliation of thedifferences between the non-GAAP and GAAP financial information, please see ourwebsite at www.tibco.com.

The participants on the call are VivekRanadivé, TIBCO's Chairman and CEO; and EVP and Chief Financial Officer, MurrayRode. I'd like to now turn the call over to Vivek. Please go ahead, sir.

Vivek Ranadivé

Thanks, Kim, and hello, everyone.We appreciate you joining us on our Q4 earnings call.

On today's call, I will make mycomments into two parts: First, a brief review of our Q4 and full year 2007results; and second, some talks on '07 and the year ahead.

Let's begin with our fourthquarter results. Total revenues came in at $186.1 million, up 16%year-over-year. License revenues were $99.6 million, up 89% sequentially and13% year-over-year.

We closed a record 139 deals over$100,000 this quarter. We added 17 deals over $1 million. We saw strength indemand across all of our products and services in Q4 with particular interestin BPM ActiveMatrix, business events and Spotfire product areas.

From a geographic perspective, wesaw strong double-digit year-over-year growth in both Europe and the Americas. Inaddition, we saw strong performance in vertical markets such as finance, telco,life sciences and retail.

We successfully increased ourcustomer base and expanded our business with market leaders such as, AirFrance-KLM, BP, Live Nation, Delta, UBS, HBOS, and the Chicago MercantileExchange, to name a few.

For fiscal '07 overall, totalrevenues were $577.4 million, up 12% year-over-year. License revenues were$259.3 million, resulting in year-over-year growth of 8%. Operating cash flowwas approximately $99 million.

Before I turn the call over to Murray, I'd like to leaveyou with a synopsis of our performance in '07, and some areas we will befocused on as we head into '08.

We started the year slowly, buthad a strong finish. There were several major reasons for this slow start.First, the change to our sales organization made after Q1 had an impact on Q2and, particularly, Q3 results. As Q4 shows, the changes have now taken hold,and we are back to executing at a high level.

Second, during the year,specifically in Q3, we experienced some turmoil in both the financial services andgovernment market, which negatively impacted results. And third, we have hadthe same amount of quarter reps for a number of years and have hit capacitylimitations.

There are also some veryimportant indicators as we exit '07. First, we feel very strongly about ourcompetitive position today. Our product set has never been stronger. Oursmaller competitors have all gone away, and the larger ones seem distracted.

Second, despite all the concernsin the market about the economy, we believe demand for infrastructure softwareis growing and its importance higher than ever. In fact, despite all thenegativity around financial services, we had our best quarter in the company'shistory. I believe this speaks for the importance of infrastructure withinleading organizations that need to invest to gain competitive advantages intough market environments.

And third, customers areincreasingly gravitating to our neutral Switzerland-like platform. We representa safe haven between the absolute with SAP and Oracle, the platforms such asJ2EE and .NET and the systems management area with HP and VMC.

As we head into '08, we will befocused on several areas: first, increasing our field organization. We need toscale that in order to grow. Second, M&A will continue to be important. Wewill explore ways to drive growth and extend our capabilities. And finally, wewill focus on growing our ecosystem of partners.

I'd also like to take a moment tothank all of TIBCO's employees for their hard work and dedication in 2007. Itruly believe we have a fantastic group of people at TIBCO all around theworld.

With that, I'll turn the callover to Murrayfor more details on the financials.

Murray Rode

Thanks Vivek, I'll begin mycomments by giving some additional details on our financial performance in Q4and fiscal 2007, and then I'll talk about our financial outlook for fiscal2008. I'll review our financials on both a GAAP and non-GAAP basis, a fullreconciliation of which was included with our press release, along with anexplanation of our non-GAAP measures.

For Q4, total revenues were$186.1 million, up 16% year-over-year. License revenues were $99.6 million, up13% year-over-year. On a GAAP basis, gross margins were 75% in Q4. Operatingincome was approximately $37.4 million; resulting in an operating margin ofabout 20%. GAAP net income was $27.6 million, or $0.14 for fully diluted share.

On a non-GAAP basis, grossmargins were 78%. Operating income was $50.2 million, resulting in an operatingmargin of 27%. Net income on a non-GAAP basis was $34.1 million, or $0.18 perfully diluted share, which was ahead of our guidance range of $0.13-$0.16.

Results, overall, for fiscal 2007were as follows: total revenues were $577.4 million, up 12% year-over-year.License revenues were $259.3 million, up 8% year-over-year. GAAP earnings pershare were $0.25 for fully diluted share, while non-GAAP earnings per sharewere $0.38 for fully diluted share.

Turning to our balance sheet,together, short- and long-term deferred revenue totaled $141.5 million, up 33%year-over-year. DSOs came in at 78 days, down from 83 in Q4 year ago. We grewour cash position during the quarter by about $42 million, ending the quarterwith approximately $266 million in cash and short-term investments.

We have $27.4 million in cashflow from operations for the quarter, giving a total for the year of $99.3million. Given the amount of our buybacks year-to-date and the recent cash usedto acquire a spot buyer, we did not buyback any additional stock in Q4. Westill have, roughly, $115 million less than our buyback plan, and fully expectto resume our buyback activity in 2008. For fiscal 2007, in total, we didretire over 25 million shares.

From a geographic perspective, Americas was upin the quarter 10% on a year-over-year basis, and represented 47% of the totalrevenue. Europe had a very strong quarter,with year-over-year growth of 25%, resulting in 41% of total revenue. Asia-Pacificexperienced 6% year-over-year growth, making a 12% of total revenue.

Total revenue by vertical for Q4was as follows: financial services 33%; Telco 12%; energy 9%; retail 6%, lifesciences 5%. No other industry represented more than 5% of revenue. Other keymetrics for the quarter are as follows: we had 17 deals over $1 million. Ourtop 10 customers represented 30% of revenue. We had 139 deals over a $100,000,and for deals over $100,000, the average deal size was approximately $685,000,which compares to $540,000 last quarter, and about $760,000 in the year agoperiod.

From a product segmentationstandpoint, SOA related products were roughly 60% of revenue; BPM wasapproximately 15%; and business optimization, which includes our businessevents and Spotfire products, was about 25%. Spotfire related sales exceededour expectations, again, this quarter and represented stellar efforts on thepart of the Spotfire team.

Lastly, I will address ourfinancial outlook. It's worth reiterating that we believe our annualperformance is our most relevant period of measurement, given our deal sizesand seasonal patterns, we can experience quite a lot of variability fromquarter-to-quarter. We expect the seasonal patterns that we have seen over thepast few years to continue, which means we expect Q1 to be down sequentiallyfrom Q4, Q2 to show modest growth over Q1, Q3 to be relatively flat with Q2 and,of course, the seasonally strong Q4. In addition, while we are confident aboutour long-term growth opportunity and the market position we hold, we believeit's also prudent to consider some general economic trends which suggest someuncertainty.

So, if we take all thisbackground into account, we expect for the year total revenue to be in therange of $660 million-$670 million, representing 14%-16% growth over 2007.License revenue for the full year should be between $300 million-$310 million,representing growth of 16%-20% year-over-year.

Our non-GAAP operating marginshould range between 19%-20%. Full-year non-GAAP earnings per share should be$0.43-$0.45, which represents year-over-year growth of 13%-18%.

GAAP earnings for fully dilutedshare should be in the range of $0.23-$0.25. Our outlook for EPS currentlyassumes our fully diluted share count to be in the range of 190 million-195million shares.

But this, obviously, depends onthe degree to which we execute our buyback program, and our actual share priceover the course of 2008. Our assumed pro forma tax rate for 2008 is 35%.

And looking at our operatingexpenses more closely, we expect sales and marketing cost for the year to be uproughly inline with revenue growth. This will be driven by our investment inour field organization, as well as some additional market programs.

We plan to increase our quartercarrying reps to about 190, including Spotfire, by the end of fiscal 2008, whichwe believe will help the back half of 2008, and set a stage for continuedgrowth into 2009.

We expect R&D expense to stayrelatively flat as a percentage of revenue--that's 15%-16%. Major components ofthe R&D expense include a full year Spotfire and continued investment inkey growth areas, such as SLA, complex of endprocessing, and analytics.

We expect G&A expense to growmore slowly, at about half our revenue growth rates. With this longer-termcontext in mind, we expect total revenues in Q1 to range from $142 million-$146million, representing, year-over-year growth of about 13%-16%. License revenuesfor Q1 should range from $58 million-$62 million, resulting in year-over-yearof 11%-19%.

This revenue range should producenon-GAAP operating margins for Q1 of between 11%-13%. Non-GAAP EPS will rangebetween $0.06 to $0.07 and GAAP EPS should range from $0.01-$0.02.

And with that, Vivek and I willbe happy to take your questions.

Question-and-Answer Session

Operator

(Operator Instructions)

Our first question today is fromAlan Cooke from Merrill Lynch.

Alan Cooke - Merrill Lynch

Murray, thank you very much andcongratulations on the quarter. Why do you think there is such a large change?Was it purely execution on your part or was there a macroeconomic element to it,as well?

Vivek Ranadivé

We think it was a couple ofthings, Alan. One is that the changes that we had put into play earlier in theyear finally started taking hold. So, it was execution. And the other thing is,we have been holding firm, in terms of our pricing. And I cannot compare it tobeing in the detox program, where you suffer a few quarters--and you do that--butI think eventually it starts paying off.

And so, it was a combination offactors. And, of course, Q4 is seasonably always strong for us.

Alan Cooke - Merrill Lynch

Okay. And in terms of youroutlook for next year, you mentioned that you remain confident about spending.What gives you that confidence that spending is going to be strong into Q1 andthe rest of fiscal '08?

Vivek Ranadivé

From what we saw in Q4, as anexample, we’ve actually had great strength in the fiscal services sector andeven companies that were not doing so well. We closed a big deal with Citibank,as an example.

And so our feeling is that peopleare continuing to spend in this area almost independent of what their situationis. And the early indications from what we are seeing so far also give us thatconfidence.

Alan Cooke - Merrill Lynch

How does your pipeline coveragelook at this point, versus the same point last year?

Vivek Ranadivé

Well, it looks positive. We feelvery good about it.

Alan Cooke - Merrill Lynch

Okay. And then with respect to Spotfire, can you breakout the license revenues that yougot from Spotfire?

Murray Rode

So, Alan, we're lumping Spotfireon a go-forward basis, really, with the business optimization category; I thinkwe talked about that last quarter. Roughly though, it was about half of thebusiness optimization number for license.

Alan Cooke - Merrill Lynch

Okay, all right. Thank you. Andthen last question, in terms of your M&A, you mentioned M&A for nextyear is a way to help out with growth. Are there any particular product areasthat you are looking to beef up?

Vivek Ranadivé

We'd rather not say. We see someopportunities, but we'd rather not say anything at this point.

Alan Cooke - Merrill Lynch

All right. Thank you.

Vivek Ranadivé

Thanks.

Operator

And moving on, our next questionwill come from Tim Klasell from Thomas Weisel.

Tim Klasell - Thomas Weisel

Hi. Congratulations, guys, on theresults.

Vivek Ranadivé

Thanks.

Tim Klasell - Thomas Weisel

First thing--just on yourguidance--are you assuming any economic slowdown as part of this guidance, oras you've been talking to your customers, how big the consent their budgets aregoing to be growing at the same clip? Can you give us sort of an idea of whatthe economic backdrop that you are thinking of with this guidance?

Murray Rode

Tim, I think we are beingrelatively careful on what we are assuming, in terms of the environment nextyear. As Vivek said, we feel good about the demand, even in a macro environmentthat might calm down a bit. So, we are really only factoring in about somethingin the range of 6%-9% in the kind of traditional business by the way of growth.

And part of that is, is lookingat the macro environment and just being a bit cautious. And part of that is thefact that as we say we are at kind of that capacity today, then some of thehiring we are going to be doing early in the year is really what will helpdrive more growth later in the year.

Tim Klasell - Thomas Weisel

Okay. So it would be fair to saythat a lot of the growth is going to come from that business optimization partof the business?

Murray Rode

Yes, for next year, that’s right,if we are assuming 6%-9%. Now, again, we see opportunity beyond that. But basedon what we are seeing about kind of capacity constraints and what not, we areonly building that 6% to 9% into our guidance.

Tim Klasell - Thomas Weisel

Okay. Good. And then for yoursales force ramp, where did you end the year at and how should we think aboutthat ramp to the 190 people?

Vivek Ranadivé

Yes, go ahead, Murray. I am sorry.

Murray Rode

No. I was just to going to say,we ended Q4 with about 152 sales reps total across the whole company, includingthe Spotfire reps, and we have about a dozen additional hires that are invarious stages of being completed.

Vivek Ranadivé

But just to put that inperspective, about 110 of them were in the --.

Murray Rode

About 115, yes.

Vivek Ranadivé

About 110 to 115 were in the coreinfrastructure business, and that number has been fairly constant over the lastfew years. So we feel we've hit capacity with those sales people in thatbusiness. And so we do need to add to that.

Tim Klasell - Thomas Weisel

And will the ramp be evenly spiltacross the core and the business optimization or it will be more weighted onetowards the other?

Murray Rode

I mean, in terms of raw numbersit's more awaited towards the infrastructure side of the sales force.

Tim Klasell - Thomas Weisel

Okay good. And then one lastquick question. You mentioned active metrics. We haven't spoken much about thatrecently? How did that do during the quarter or did that bring any of the largedeal?

Vivek Ranadivé

It did well in the quarter. Ithad its best quarter by far during the year. Which is, largely, what weexpected, and it was instrumental in at least two of our larger deals.

Tim Klasell - Thomas Weisel

Okay, good enough. Thank you verymuch gentleman. I will head it off to the next person.

Vivek Ranadivé

Thank you.

Operator

And we will move on to John Walshfrom Citi.

John Walsh - Citi

Good afternoon. Just thoughtmaybe following up on that last question a little bit with the idea of, is thesales force going to sell across the board or we still have kind of thebusiness optimization, what's traditionally been the Spotfire businessbasically separately?

Vivek Ranadivé

What we are going to do is westill going to keep the business optimization sales force separate. But we aregoing to provide more incentives for the rest of the sales force to startreferencing and bringing in referral deals. So, we are kind of taking a smallstep in the direction of broader coverage.

John Walsh - Citi

Okay. And then, the Spotfireproduct itself, I believe, dealing with primarily in a trending I callhistorical data. But I think you talked about that moving towards handling thereal time information? You know that you core business if you will can deliverto the messaging side?

What's the progress there andwhat do you see on expectations for that?

Murray Rode

That is, John, as we've said,fuller integration with, particularly, the BPM, and business events are complexat end processing products that we have, is a longer term initiative in somethingthat will play out over the course of the next year. So, we're just in theearly stages of that now. We are starting to see some joint opportunities wherethe products can be used together as they are but that's tighter fullyintegration will take place overtime.

John Walsh - Citi

Okay, and then just the finalquestion. Even in the core business, is there certain geographies that youthink, you're going to add or verticals that you want to focus on to add theadditional quarter carrying reps where you see the existing ones strained?

Murray Rode

That's exactly what we're doing.I mean, it's worth kind of going across all of the region and where we see theopportunities we're adding headcounts. So, it's not focused on just one or twoareas. It is spread around a bit but based on what the opportunity is in thoseregions.

John Walsh - Citi

Okay, great, thanks.

Operator

(Operator Instructions). We'll gonext to Bryan McGrath from Credit Suisse.

Bryan McGrath - Credit Suisse

Yeah, guys, I want to put on mycongratulations on a great quarter.

Vivek Ranadivé

Thank you, Bryan.

Bryan McGrath - Credit Suisse

Start off with a quickclarification. Do you see your goals end 2008 with $190 reps?

Murray Rode

Yes.

Bryan McGrath - Credit Suisse

I thought, I had in my notes,that in the last quarter, you wanted to do have a 200 at the end of '08, somaybe talk to us a bit about what changed there.

Murray Rode

I think, last quarter, we said190-200 reps.

Bryan McGrath - Credit Suisse

Okay.

Murray Rode

So, quite frankly I am just beinga bit conservative on the targets.

Vivek Ranadivé

We will be happy if we could endup with 200, Bryan.And we are actually moving quite aggressively, and have already made progresseven in the weeks of this quarter.

Bryan McGrath - Credit Suisse

Sound like you had a good hiringthis quarter. 952 reps, total, give an idea of how many of those guys are fullyup and ramped in outlook full quarter, or versus the guys that are still kindof getting up to speed?

Murray Rode

Well, most ofthat ending the year, again that 952 is infrastructure sales people, plus theSpotfire sales people, so the vast majority of those are ramped up.

Bryan McGrath - Credit Suisse

I got it. Andwhat was the impacted currency on the growth in the quarter?

Murray Rode

So, overall,it was in the range of kind of 2%-3%.

Bryan McGrath - Credit Suisse

Okay. Andfinally, one last question. Due you have any major or specialized on ELAs thatare up for renewals in all these year's and particularly in the first half?

Murray Rode

Well, there isalways, I mean in any given year there is always ELAs that are coming up forrenewal.

Vivek Ranadivé

In both partsof the business both the Spotfire part, as well as TIBCO.

Murray Rode

So nothing inparticular, Bryanthat we can call out to you.

Bryan McGrath - Credit Suisse

Okay. Well thanks a lot.

Vivek Ranadivé

Thanks, Bryan.

Operator

Sterling Auty from JPMorgan hasour next question.

Sterling Auty - JPMorgan

Thanks. A couple of questions. First,on the mix of revenue you mentioned SOA at 60% of revenue; you’ve alreadytalked about a couple of the other areas. Can you just drill in for us on whatyou are seeing in terms of SOA, and was that highly responsible for financialservices being such a big percentage of revenue this quarter?

Murray Rode

It was. Financial services tendsto be a big buyer of that part of the product segment, so, yes, it was.

Sterling Auty - JPMorgan

Okay. And you mentioned FX wasall in 2%-3% impact. Can you just remind us how you actually contract? Are youcontracting in local currencies or dollars? I am surprised that it wasn'tactually higher.

Murray Rode

Well, it sort of varies a littlebit, Sterling.I think we are increasingly moving to more kind of local currency contracting,but we still have a lot of US dollar contracts.

Sterling Auty - JPMorgan

And for the hiring that you aredoing, the 12 hires that are kind of in process, can you give us an idea whatthe type of background that you are looking for or that you are getting in someof these new hires?

Vivek Ranadivé

Yes, we are looking at all theusual places: Oracle, BEA, SAP companies. There is a company called Trilogy.So, we are looking at people from those sources, and we prefer our salespeoplewith some experience. And we are having quite a bit of success right now. Weare actually getting a lot of resumes from all those companies.

Sterling Auty - JPMorgan

Okay. Two more questions, firston deferred revenue. The deferred revenue growth that you saw in the quarter,was it all maintenance, or was there any product in there that we could see andwhat should happen to that from a trend perspective going into the firstquarter?

Murray Rode

Really, it was pretty consistentwith all our past quarters where a vast majority of it is maintenance, Sterling.

Sterling Auty - JPMorgan

All right. And last question, youmentioned that one of the goals in '08 is to expand through partners. I thinkwe've talked about this a couple of times in the past. But can you give us yourlatest thinking on what are the types of partners that we should be lookingfor, TIBCO's partner up within '08 and where do you see the revenuecontribution from these partners going, over time?

Vivek Ranadivé

Yes, there is two types ofpartners, Sterling.One is just better looking with systems integrators; services companies likeEDS partnership, which has been very successful, Infosys, and so on; Wipro. So,that's one kind of partnership, that more would be from that arrow.

The other one is that we areseeing that customers are increasingly gravitating towards us as a neutral safehaven of bridging the gap between different platforms, and so on. So, we thinksome guys that it might have been viewed as competitors could actually end upbeing partners, as they try to extend beyond one platform into the nextplatform, and we can be the mechanism for doing that. So, we see some fairlyinteresting opportunities along those lines.

Sterling Auty - JPMorgan

Sort of follow-up just on that, thatmakes me think of two companies--either HP or IBM. Is that what you arereferring to?

Vivek Ranadivé

Well, it's those kinds ofcompanies, but it's not just them. There are other software companies - and soon, that are trying to -- one company trying to get into the other, whetherit's development platforms, management platforms, application platforms. Andpeople view us as the lesser of two evils. Kind of the neutral party by which they canreach out into their competitors' environment.

Sterling Auty - JPMorgan

Yes. Thank you, guys.

Vivek Ranadivé

Thanks.

Operator

(Operator Instructions)

We will move on from John DiFuccifrom Bear Stearns.

John DiFucci - Bear Stearns

Hello. Just a couple of quickquestions here. A really strong quarter here and strong guidance too. Afollow-up to Tim's questions, though, specifically for Q1, in regard to thefinancial services vertical?

It sounds like you think thingslook pretty decent there, and we have heard similar things from othercompanies, but have you taken into account in your guidance a weakness into thefirst quarter that might be perhaps greater than the simple normal seasonal dipthat you see? Or given your pipeline, given your visibility, do you thinkyou're just going to see a normal season out there from there?

Vivek Ranadivé

Well, a couple of things. One, iswe are being cautious in terms of the seasonality, plus there is all the cloudshanging over the economic landscape. So the answer to that is, yes, we'll befactoring that in.

The second thing, with regard tofinancial services, is we actually had a very strong quarter, arguably thestrongest ever in financial services. And most of that, I think almost all ofit was outside of the investment banking arena. So, it was with retail banks.It was with insurance companies, with exchanges. So, it fell outside of thetraditional investment banking business.

John DiFucci - Bear Stearns

Okay. And just a follow-up tothat on the next quarter guidance, you have margins actually down year-over-yearin Q1, although it does look like things were pretty good out there for you.Just curious, because you said that the hiring was really going to be backhalf-loaded. Why margins, we should expect to be down year-over-year?

Murray Rode

Well, actually we said the effectof the hiring would be back half, right. So, we're hoping to higher the salespeople early in the year, so we still get the benefit in 2008.

John DiFucci - Bear Stearns

Okay, got it. Thanks, guys.

Murray Rode

Thanks.

Operator

Our next question comes fromDerek Bingham from Goldman Sachs.

Derek Bingham - Goldman Sachs

Hi, congratulations on thequarter again. Just two quick ones. One, we've talked about some of the otherverticals. I wonder if I could just get a thought on the telco vertical, onyour outlook there for 2008. What you think their spending prospects are nextyear?

Vivek Ranadivé

Yes, for '08, we are actuallylooking at a pretty diversified base of revenues. Telco will be one of thestrongest verticals. We are seeing a lot of interest in that area but I don’tthink more it will be any stronger than pervious years?

Murray Rode

No, pretty consistent with whatwe’ve been doing.

Derek Bingham - Goldman Sachs

Okay, great. And then I just,your guidance implies expanding margins you’re doing a lot hiring and it takesthose folks time to get productive. Can you just get some color on kind of outside of G&A are there other areas I guess within sales and marketing whereyou’re going to be cutting back to try to show those margins?

Murray Rode

Well, Derek, it's not, I wouldn’t callit cutting back. I think that we have last year, or through the course of '07,we have done some hiring in other parts of the field organization and inmarketing, and so the emphasis for new hiring is really just shifting to focusmore on the quarter heads.

Derek Bingham - Goldman Sachs

Okay. Got it, thank you andcongratulations.

Murray Rode

Thank you.

Operator

And moving on, we will hear from Ajay Kasargod from Piper Jaffray.

Brandon Chan - Piper Jaffray

Hi, this is[Brandon Chan] sitting in for Ajay Kasargod. Just a two quick questions. Haveyou made any changes to the comp plan?

Murray Rode

Yes. We have,we’ve tiered our comp plans a bit more going into '08so we are ranging our…

Vivek Ranadivé

We arereferring to the sales people here.

Murray Rode

Yeah.Referring to the sales. I think that's you are asking about.

Brandon Chan - Piper Jaffray

About comp plan.

Murray Rode

Yes, so they are being tiered toa greater extent than they have in past years.

Brandon Chan - Piper Jaffray

Okay, and what's the quarter?

Murray Rode

So it will range from roughly $2million-$4 million.

Brandon Chan - Piper Jaffray

Okay. And on last question do yousee any witness in the government sectors?

Murray Rode

In the US, yes, certainly.

Brandon Chan - Piper Jaffray

Okay. That’s all from me. Thankyou.

Murray Rode

Thank you.

Operator

And our last question, today,will come from Raghavan Sarathy from Ferris, Baker Watts.

Raghavan Sarathy - Ferris, Baker Watts

Good afternoon, and thanks fortaking my questions. In terms of the deal metrics, can you give us some sensefor the Spotfire contribution and the deal for 100K and then were there anydeals over $1 million from Spotfire?

Murray Rode

So, I think as I said earlier inthe call, that Spotfire was contributing roughly half of the businessoptimization components, and there were 139 deals, in total, or greater than a$100,000--17 of which were greater than $1 million, and there were, I believe,two Spotfire deals that were over $1 million.

Raghavan Sarathy - Ferris, Baker Watts

And then, how many of the 139were actually from Spotfire?

Murray Rode

I don’t have that number in frontof me. I am sorry.

Raghavan Sarathy - Ferris, Baker Watts

And then, a second question. Lasttime, you talked about building a second tier sales force that’s around thatmillion annual quota? Is that sales team, is that going to be across the boardon the infrastructure side or is it more on the BPM business optimization? Canyou give us some color on that?

Murray Rode

Yeah. So that’s shifted a bit interms of how we have implemented it. I think someone else asked about changesin the comp plan, we said quarters are ranging from to $2 million-$4 million.And that's pretty much across the regions and in the lower quarters there willbe some focusing in terms of which products or the range of products that aresold.

Raghavan Sarathy - Ferris, Baker Watts

That’s it. Thanks.

Vivek Ranadivé

Okay. Thank you. We will nowconclude this call. I would like to close by thanking you all for joining us.Happy holidays. And we look forward to speaking with you in the New Year.Thanks and goodbye everyone.

Operator

Thank you for joining us. We willnow conclude TIBCO's Q4 2007 Earnings Call.

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Source: TIBCO Software F4Q07 (Qtr End 11/30/07) Earnings Call Transcript
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