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Tibco Is Making a Strong Statement

NEW YORK ( TheStreet) -- Given the weaker-than-expected earnings results recently released by Oracle (ORCL) and Red Hat (RHT), there's no question that the long-awaited return of IT enterprise spending has yet to materialize.

When you combine the prolonged weakness with recent political wrangling about "debt ceilings" and "government shutdowns," this makes the results from Tibco (TIBX), which I recommended back in July as a great buy, all the more impressive.

While the macro environment has certainly taken a toll on the likes of Microsoft (MSFT) and IBM (IBM), Tibco's outperformance makes it tough to keep using what's become cliched excuses. I'm not suggesting these exterior macro factors don't play a key role in declining revenues, I'm nonetheless warming up to the idea -- at least in this sector -- that Tibco is beginning to steal meaningful share from its rivals.
[Read: <a target="blank" data-add-tracking="true" href=""><em>Palmisano Sees No Innovation Slowdown at Apple</em></a>]

What makes this story even more impressive is the company has fought a long arduous battle to build itself into a formidable cloud operation. Given all of the hoopla that surrounds (CRM) and Workday (WDAY) for their SaaS (software as a service) capabilities, Tibco has felt disrespected. But you don't get the Street's attention by being bitter.

To that end, prior to the company's announcement, I told investors that if management of this company wanted to be taken seriously, it needed to make a strong statement. And with adjusted profits coming 33% above management's prior guidance, sending the stock upward by 6%, Tibco's statement was heard loud and clear.

Revenue jumped 6.2% to $270.9 million, helped by strong demand for each of the company's three main segments, which includes licenses, service and maintenance. Equally impressive was that revenue in the U.S. and Europe advanced 11% and 12% year over year, respectively.

What's more, Tibco has figured out ways to differentiate itself from Oracle and IBM, with Tibco's CEO Vivek Ranadive stating proudly, "We won every single deal." In other words, even though Tibco's prices were moderately higher than some of its rivals, the company was able to convince customers why its products were better.

So, unlike the June quarter where Tibco lost business due to price, management has been working to grow Tibco's capabilities in areas like real-time business intelligence, visualization and complex event processing. These are technologies that are specifically targeted to capitalize on the growth of big data. With revenue growing more than 6% compared to Oracle's 2%, clearly customers are responding.
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