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The Information Management 50

Top Vendors Endure a Shaky Year, Look to SaaS and SOA to Buoy Revenues. Business intelligence companies are doing better than average.


Top Vendors Endure a Shaky Year, Look to SaaS and SOA to Buoy Revenues

Information Management Magazine, May/June 2010, Robert Hertzberg

Top 50 For 2010, Information Management commissioned a ranking of the top 50 revenue-producing product vendors in information management - those that supply the tools and knowledge used by organizations to collect, distribute, analyze and report on data. (To review an interactive list of the IM 50, click here.)

Our examination of these influential hardware, software and service providers (see: Methodology sidebar at end) found that more than half suffered revenue declines in 2009, when the world economy was reeling and the U.S. economy contracted by 2.4 percent.

Among the top 10 companies in the IM 50, only Google, which earns most of its revenue from search advertising, and NetApp, a provider of enterprise storage, reported sales gains. The median revenue change among the IM 50 was a decline of 1.1 percent.

Oracle is well positioned in this world of best-of-breed software procurement, with customer-centric products like Fusion middleware and Hyperion for business analytics, Fauscette said. Revenue at the company (No. 5 on the IM 50) fell just 1.3 percent in 2009 and is rebounding sharply this year.

In a very different model based on hosted application services, Salesforce.com (No. 19) is riding the success of a deep network of providers based around a straightforward CRM application. Salesforce's revenue surged 24 percent in 2009, making it the fastest growing of the $1 billion-plus companies on our list.

During a year when companies were cutting back, Salesforce benefited immensely from the "no software" model that sidesteps license fees at a time when operating budgets are driving new project spending. Indeed, software companies that rely on license fees - which are booked by buyers as capital expense - were walloped in 2009 as cap-ex budgets were frozen during the financial crisis and wider recession.

To some extent, the biggest companies in the IM 50 (No. 1 Hewlett-Packard, No. 2 IBM and No. 3 Microsoft) all suffered from capital spending cutbacks. SAP (No. 6) paid the biggest penalty among leading companies as its revenue fell 7.7 percent. "They aren't necessarily seen as a best-of-breed provider," Fauscette said, and "they don't really have a strong SaaS story. Their new license growth really dropped off."

In general, companies whose products are easiest to cost-justify are doing the best. Business intelligence is one such product area, and the strong BI offerings of Oracle, Informatica (revenue up almost 10 percent), MicroStrategy (up 4.8 percent) and SAS Institute (up 2.2 percent) ex plain the relatively strong performance. "There's a very strong focus on real-time analytics - how you can use what's happening to your business to respond more effectively and rapidly," said Bartels.

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