TIBCO on the block?

TIBCO share spikeIs TIBCO in the block? Shares in TIBCO are currently spiking close to 10 percent following a Seeking Alpha report that claims the company is up for sale.

  • Dow Jones reports Tibco (TIBX +5.8%) is reaching out to potential buyers. Shares have spiked in response.
  • SAP was at one point rumored to be interested in the middleware/analytics software vendor, which has had a rough year to date. But SAP has since declared it’s not looking to make a large acquisition.
  • Activist investor Praesidium Investment disclosed a stake in Tibco in June, and said it would share its views on the company with “potential acquirers.”

TIBCO has made no official statement and you wouldn’t expect them to. This is not the first time the company has been rumored to be on the block. Only this time, the rumor may well have legs.

Over the 15 years I’ve been following the company, I’ve seen it rocket in the dot com boom period, at one time reaching a valuation of $15 billion at a time when it only had $300 million in revenue to a more sedate $3.5 billion on annual sales a tad north of $1 billion but a strong EPS.

In the past when such rumors have come up I have consistently said the company would make a good fit for SAP given that its own integration software is spartan. But there was always the possibility of a difficult culture clash and even though fluids were exchanged in the form of coffee over the years, they never came to anything.

This time, TIBCO has an added attraction – Spotfire – an analytics solution set that has strong potential in SAP’s core markets if it wasn’t for the fact that Tableau is eating everyone’s lunch. That in turn has meant that CEO Vivek Ranadivé has had to admit the company took its eye off the ball regarding a product that many believe is the only real engine for growth left in TIBCO.

All of which leaves TIBCO struggling to find a buyer, if that is indeed what they are doing. At this stage, SAP would have to think at least twice before making a play for a company where it has also been rumored that the CEO wants to get closer to $5 billion in  a sale rather than the current market valuation. That no longer seems likely.

TIBCO’s difficulty is that with Spotfire currently mired, its core integration business isn’t really going anywhere. The market does not yet have the appetite for another round of large scale integration projects when even large enterprises can make do with a mixture of semi-detached applications running both on premise and in the cloud.

It will be interesting to see how this plays out but don’t hold your breath. Activist investors or not, we’ve all been here before. But then the persistent rumor is that Ranadivé has other things on his mind – basketball.

Den Howlett
Following 20+ years in finance and IT related roles, Den Howlett became a freelance writer/analyst/commenter specialising in enterprise IT. I co-launched Information Week in the UK (1996-7) and was a contributor to numerous UK based trade magazines. Most recently, he was a long term columnist on ZDNet. Today, Howlett provides strategic product direction support to a variety of enterprise vendors along with delivering M&A due diligence services. The raw idea for diginomica came to him at a time when enterprise topics in media were being crushed by consumer stories. There had to be a better way. diginomica is that better way.
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Disruptor, enterprise applications drama critic, BS cleaner, buyer champion and foodie trying to suck less every day.
Den Howlett
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  • Yup. Alas. We’ll just tinker on until some Fortune 100 does get it and then… and until then…

  • dahowlett says:

    MartijnLinssen You may know that and I may well agree but I don’t see any obvious evidence of it happening in the wild. Too many LOB projects running. Having said that I am seeing data integration but not process. Yet. The difficulty for an SAP or Oracle is that they take one look at TIBCO’s core business and go…hmmm….I hear the CEOs rhetoric but where’s the demand?

  • Ah, the good old rumours.
    Pure integration players haven’t been doing well since the Bubble burst and everyone went back to point-to-point integration, in a later stage also motivated by the grand SOA scheme that accomplished hardly anything but happy SI’s and IBM’s and such, and pushed integration back for decades
    When you say “when even large enterprises can make do with a mixture of semi-detached applications running both on premise and in the cloud.” – how exactly would that work? Wouldn’t make that integration a whole lot harder, especially because the SAP’s of this world can no longer use the escape route of building in functionality they can’t integrate with (and thereby tripling cost, dependencies and lock-in)
    Integration is the new Operation, and traditional on-premise dinosaurs like SAP and Oracle could do some damage control and facilitate the transition to SaaS by having something like Tibco
    Although most if not all integration players have spread their money over baskets such as data cleansing, validation and analysis, hassle free any to any integration remains their very strong core.
    And enterprises will scream for that once they extend their boundaries from users to clients – because those don’t put with their crappy solutions