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August 23, 2013
Qlik Tech (QLIK) Shares Jump 6.8%, Hit New 52-Wk High
Shares of Qlik Technologies (QLIK, $34.75), a provider of business intelligence (BI) solutions, today rose 6.8% on 2.5x average daily volume and reached a new 52week high of $35. Here is our piece on Qlik from the July 2013 issue of Tech-Stock Prospector: The $14-billion business intelligence (BI) software market is ripe for continued disruption because the traditional BI companies (all now owned by the stack players) have not kept up with the technological advances being made by the next-generation vendors. Customers these days want to analyze their data in a visual format, and they are increasingly turning to the three major BI 2.0 players, including Qlik Technologies (QLIK, $29.28). Qlik and the other two key disruptors—the Spotfire division of Tibco Software (TIBX, $22.12) and Tableau Software (DATA, $62.86)—combined control just 5% of the overall BI software market. SAP (it bought Business Objects), IBM (Cognos) and Oracle (Hyperion) do have long-term relationships with customers and are able to include BI solutions as part of packaged deals, but this type of weak strategy (without any innovation) won’t be enough to keep the BI 2.0 vendors from continuing to win market share over the next several years. The big topic of tech conversations now is Big Data. The problem is it’s often difficult to unlock insights across various data stores. IT departments can’t keep up with demand to deliver applications that help ordinary business users make sense of their enormous amounts of data. An important point: Big Data is not always useful data. Data is stored across organizations in many different places and formats. Real value comes from seeing associations and comparisons from a variety of underlying data sources that lead to real insights. Qlik helps customers handle all of these challenges. Qlik’s solutions help users access and analyze data, regardless of source or size, on their own. Unlike tools that only do visualization, the company’s QlikView
platform enables users to make more informed decisions by revealing connections between multiple data sets, and encourages users to intelligently interact with data in order to get the best results. Users can then see things they weren’t even looking for, allowing them to act more quickly and strategically. For example, hospitals deploy Qlik’s Big Data solutions to analyze years of statistical data on patient diagnosis and treatment to improve overall practices. Using this data, medical centers can refine patients’ journeys through the system, resulting in better overall experiences and outcomes. Another customer, 7-Eleven, initially deployed QlikView to optimize its field operations, and is now expanding its use case to improve supply chain insights. The convenience-store chain, with more than 8,500 locations in North America and nearly 41,000 in the rest of the world, uses Qlik solutions to boost overall operating efficiencies across all of its locations. Qlik uses a land-and-expand strategy, with 65% of all license and first year maintenance billings in Q1 coming from existing customers. Proof that the strategy works: Qlik in 2009 signed up a major European retailer for a 50-seat deal; by last year, there were more than 700 users on this account. In Q1, the retailer significantly expanded its QlikView deployments. In addition to a direct sales force, Qlik utilizes a partner network of more than 1,500 in 100+ countries. In Q1, Qlik’s partners drove 63% of the company’s software license and first year maintenance billings. A sign that Qlik is gaining traction in the enterprise: the company is signing a greater number of larger deals, many of which are being closed by partners. In Q1, Qlik inked 32 deals worth more than $250,000 each, up from 25 in the yearago period. There were three deals worth greater than $1 million, up from one in the prior-year quarter. Management notes that average deal sizes within the bigdeal segment are getting larger, another positive sign. On the Q1 earnings call, Qlik CEO Lars Bjork said the major competitive dynamic these days in the analytics space is that the big stack players are losing out on deals more often. While Bjork would not provide any details on direct win/loss figures against recently public (and fast growing) Tableau, he did say Qlik sees the BI 2.0 competitor in only about 10% of all sales engagements. In April, Qlik raised 2013 revenue guidance to a range of $471 million to $481 million (+21% to +24%) from the previous range of $465 million to $475 million. One note about Qlik: about 71% of revenue comes from international markets, with Europe accounting for 56%.
UPDATE: With the release of Q2 results in late July, Qlik raised the low end of its 2013 revenue guidance range to $473 million from $471 million, maintaining the high end at $481 million. -----------------------------------------------------------------------------------------------------------Read the August 2013 issue of Tech-Stock Prospector on your Amazon Kindle or Kindle for iPad/iPhone reading app. Order the August 2013 issue of TSP here: http://www.amzn.com/B004T6Z0ME Here are some of the topics covered in the August 2013 issue: *New Web Leaders: LinkedIn & Zillow *Yelp’s expanding presence in mobile *Why some big investors like OpenTable *A look at a few tech IPO winners of 2013 *Tableau Software shakes up enterprise analytics *Why Marketo shares doubled off the June low *Gigamon offers high growth in the networking sector *Cisco bulks up its security portfolio with Sourcefire purchase *3 emerging names in IT security *TSP Tech Disruptor Update: Ultimate Software *Cornerstone OnDemand builds its cloud user base *Riverbed Technology struggles to integrate OPNET acquisition *Fortinet regains its footing in networking security *Emerging growth focus: Tangoe flourishes in a tech niche *Symantec’s turnaround story remains on track *Aruba Networks regaining some competitive edge? *Deal Report: FireEye IPO
Order the August 2013 issue of TSP here: http://www.amzn.com/B004T6Z0ME
Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20 years of experience covering the tech sector. He is a former senior writer with Louis Rukeyser’s Wall Street. TechStockProspector.com, launched in 2003, is an investment-research service focused primarily on the networking, storage, security, wireless and software sectors. Annual subscription: $350. For more information or to place an order, call 800-392-0998.