BOBJ Results

BOBJ announced their results and Sent Shares South by over 12%; only 10% of Customers Have Upgraded to XI2   



usiness Objects announced its quarterly profit fell 18% as expenses, including those for stock options, rose to more than offset a 12% increase in revenue. 


According to SG Cowen, “We Remain Cautiously Pessimistic. We believe fundamentals at BOBJ are 100% tied to the current XI product cycle. Our FY06 earnings model is predicated on the assumption that this is the year BOBJ sales reps sell back into loyal accounts that have been starved for product for years. While XIr2 product cycle may be two years long, we expect preponderance of license sales to be closed in FY06, putting growth in FY07 at material risk. Three other factors also worry us: 

1. SI partners continue to grumble about encroachment from BOBJ’s Services arm, which appears to be alienating an important part of the ecosystem. Co will have a hard time driving rev growth if partners start moving away from BOBJ to other BI vendors. 

 2. Despite co’s comments on growth from the SRC acquisition, we aren’t hearing about it in the field. If co doesn’t plant Performance Management seeds as it sells XIr2, it’s going to be hard to harvest that revenue stream next year. 

3. ORCL’s BI efforts have had new life breathed into them with Siebel Analytics, SAP’s mediocre offering has the benefit of a massive installed base, and MSFT continues to provide the low cost alternative.â€Â? 



They should also be worried about the fact that customers are slow to migrate..According to (see above) BOBJ CEO, only 10% of BOBJ customers have taken on the cost and expense of migration.