Qlik Technologies last week took a major step to boost its positioning against key competitor Tableau Software. It introduced Qlik Sense Desktop, an application targeted at the fast-growing, self-serve data visualization market.
Qlik Sense is the initial piece of Qlik’s .Next offering (the main Server edition is scheduled for a September launch), which aims to make tools for business intelligence (BI) easier to use for a wider variety of enterprise employees. The Server edition will feature server-side deployment, a mobile-first focus, collaboration and expanded enterprise capabilities.
Stepping into the Spotlight
According to Qlik CEO Lars Bjork, the company is bringing “BI out of the back office and into the front lines of business.” Bjork sees Qlik Sense, downloadable now for free, as a lead-generation source for the company because it’s expected to seed demand ahead of the upcoming launch of Server.
With Qlik Sense, users can create simple drag-and-drop dashboards to help them better analyze and understand Big Data flowing across an organization. No Qlik-specific skills are needed, even for users who want to create their own apps.
More sophisticated users will be able to tap into the skills of a huge group of Web developers to build out more complex visualizations, according to Bjork. Qlik partner Deloitte was actively engaged with the Qlik Sense R&D team to help make the solution more compelling. A key feature: open APIs that will bring advanced Web development capabilities to industry-specific analytics applications.
Bjork emphasizes that the company’s core QlikView solution, a platform for guided analytics applications, will remain a key part of the portfolio. No one will be forced to move over to Qlik Sense/Server, meaning Qlik will now have a two-product focus.
While QlikView will still be the solution of choice for Qlik analytics gurus, Qlik’s new data visualization offering expands the company’s reach to a greater pool of potential buyers—those who want to quickly get up and running with an easy-to-use BI solution that’s capable of being accessed solely from a smartphone or tablet.
One important feature of the new solution is Storytelling, which allows users to go beyond static pictures to share their data visualization insights with others. Storytelling brings data visualization to life, enabling a live conversation between the creator of the story behind the data and the audience. Those viewing the story will be able to interact with the prepared narrative, question the supporting material and help guide the decision-making process surrounding the data, says Bjork.
Recent Performance Above Expectations
Ahead of the .Next product cycle, there had been concerns on Wall Street about execution risks at Qlik because customers often defer purchases of existing solutions if they know a new one is set for imminent debut.
But Qlik last week put those worries to rest, reporting that second quarter revenue grew 22 percent to $131.6 million, coming in comfortably ahead of the consensus estimate of $125.2 million. Product revenue advanced 11 percent to $66.9 million, while maintenance revenue rose 32 percent to $50.9 million, helped out by better-than-expected renewal rates.
The company in the latest quarter generated 65 percent of license and first-year maintenance billings from its pool of roughly 33,000 existing customers. Direct sales represented 48 percent of billings, with indirect partners accounting for the remainder.
Qlik’s revenue in the second quarter showed solid growth across all geographies, expanding 23 percent in Americas, 21 percent in Europe and 20 percent in the Rest of World region.
Part of the outperformance in the latest quarter could be attributed to strong underlying enterprise demand for BI solutions in general. For example, Ford Motor Company is now deploying Qlik solutions to gain better insights from many disparate data sources. The main goal is to help the company optimize its supply chain, according to Bjork. With QlikView, Ford’s manufacturing plants are connected to suppliers, allowing all involved to leverage the platform to access the same information to drive improved operating results.
Qlik in the second quarter closed 109 deals worth more than $100,000 each (made up of license revenue and first-year maintenance), up from 104 in the year-ago period. The company even signed three deals worth more than $1 million, vs. two in the second quarter of 2013.
For the third quarter, Qlik offered revenue guidance of $122 million to $126 million, with the midpoint of the range ahead of the consensus estimate of $123.2 million. The company maintained its 2014 revenue guidance range of $545 million to $555 million.
Qlik Shares Rally
Following last week’s release of the second quarter numbers, Qlik shares jumped nearly 15 percent in one session. The stock, recently trading around $26.80, has rebounded 33 percent from its 52-week low of $20.17 reached in the middle of May.
Some on Wall Street have been getting more positive on Qlik, with Morgan Stanley saying the new product cycle will lead to improved positioning and sales execution, creating more opportunities for the company to expand its BI market share in the enterprise. Prior to the release of second quarter earnings, Barclays upgraded Qlik shares to ‘Overweight’ and set a price target of $31, saying it sees the company’s new data visualization solution driving meaningful upside to the top line.
About the Author
Robert DeFrancesco is a seasoned tech-stock analyst, who, for 13 years, covered the technology sector for Louis Rukeyser's Wall Street newsletter. In 2003, he launched Tech-Stock Prospector, a unique investment research service utilizing a combination of fundamental and technical analysis to identify and capitalize on inefficiencies within the tech-stock sector.
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