Progress Software: SOA Development Leader Raises F2007 Revenue Forecast | AMR Research
Progress Software: SOA Development Leader Raises F2007 Revenue Forecast | AMR Research
IT Management and SOA
Progress progresses
Progress Software just reported 2Q07 results. Revenue rose by 9% (5% in constant-currency terms) to $120 million from $110 million in 2Q06 and relative to consensus expectations of $116 million. Software license revenue increased by 8% (4% in constant-currency terms) to $44.6 million from $41.4 million. GAAP operating income edged up by 3% to $11.3 million from $11.0 million in 2Q06. Net income jumped by 9% to $8.4 million from $7.7 million in the year-ago quarter.
While Progress’ service-oriented architecture (SOA) products represent a small portion of the company’s overall revenue, the SOA product sales are growing at a faster rate than its traditional OpenEdge product suite, which is responsible for the bulk of revenues. Still, Progress is often overlooked as a leader in the development of the SOA market, though not by investors: The shares have outperformed those of its SOA market peers the past year. The SOA products, Sonic, Actional, and DataXtend, have helped the company sell directly into new, lucrative markets for high-end performance systems. The SOA products have helped Progress minimize the loss of VARs to other platforms like those from IBM and Microsoft. Because Progress’ resellers sell predominantly to small and midsize businesses (SMBs), the majority of Progress’ revenue comes from SMB accounts.
However, while Progress offers high-performance SOA enterprise service bus, activity monitoring, and SOA management tools, it does not provide much in the way of business process modeling or enterprise catalog functionality. As a result, Progress’ SOA product is better suited for developers building new Java or OpenEdge applications than for business analysts looking to create SOA composite applications from existing enterprise applications. In order to compete in this market, Progress likely will have to acquire a business process management (BPM) vendor. For more on Progress and what its competitors are doing in this area, see, “Progress Software: SOA Development Leader Raises F2007 Revenue Forecast.”
IT Management and SOA
Progress progresses
Progress Software just reported 2Q07 results. Revenue rose by 9% (5% in constant-currency terms) to $120 million from $110 million in 2Q06 and relative to consensus expectations of $116 million. Software license revenue increased by 8% (4% in constant-currency terms) to $44.6 million from $41.4 million. GAAP operating income edged up by 3% to $11.3 million from $11.0 million in 2Q06. Net income jumped by 9% to $8.4 million from $7.7 million in the year-ago quarter.
While Progress’ service-oriented architecture (SOA) products represent a small portion of the company’s overall revenue, the SOA product sales are growing at a faster rate than its traditional OpenEdge product suite, which is responsible for the bulk of revenues. Still, Progress is often overlooked as a leader in the development of the SOA market, though not by investors: The shares have outperformed those of its SOA market peers the past year. The SOA products, Sonic, Actional, and DataXtend, have helped the company sell directly into new, lucrative markets for high-end performance systems. The SOA products have helped Progress minimize the loss of VARs to other platforms like those from IBM and Microsoft. Because Progress’ resellers sell predominantly to small and midsize businesses (SMBs), the majority of Progress’ revenue comes from SMB accounts.
However, while Progress offers high-performance SOA enterprise service bus, activity monitoring, and SOA management tools, it does not provide much in the way of business process modeling or enterprise catalog functionality. As a result, Progress’ SOA product is better suited for developers building new Java or OpenEdge applications than for business analysts looking to create SOA composite applications from existing enterprise applications. In order to compete in this market, Progress likely will have to acquire a business process management (BPM) vendor. For more on Progress and what its competitors are doing in this area, see, “Progress Software: SOA Development Leader Raises F2007 Revenue Forecast.”
posted by Albert van Grondelle at 4:55 AM
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