Enterprise headlines and summaries, 2009-05-23

  • Analysis of Workday’s capital infusion
    Some of the data points in it suggest that: – total capital raised in all five rounds is approximately $150 million – current capitalization may last and negate the need for future venture rounds – Dave still owns over half of the company … One implication of this financing though is clear: the pre-money valuation on this transaction must have been very, very high. To grab $75 million in financing and not dilute Dave and Greylock’s investment much mean that either NEA didn’t put much in this deal or that the pre-valuation valuation was very high. That said, this deal is a remarkable deal in that so much money was raised with a likely high valuation in this very tough economy.
  • Salesforce.com delivers mixed fiscal year outlook: Earnings up, revenue light
    Indeed, Salesforce.com’s outlook portends some choppiness ahead. For the second quarter, Salesforce.com projected earnings of 14 cents a share to 15 cents a share with revenue of $312 million to $313 million. Wall Street was expecting earnings of 13 cents a share on revenue of $319 million. However, Salesforce.com cut its full year revenue forecast from February. It projected revenue of $1.25 billion to $1.27 billion. Earnings will be 59 cents a share to 60 cents a share. Wall Street was expecting earnings of 55 cents a share on revenue of $1.3 billion.
  • Citi Downgrades salesforce.com (CRM) to Hold; Lowers Estimates
    Citi analyst says, “CRM posted disappointing def. revenue growth of 17% vs. our 22% est. Overall pipeline remains healthy, but lower conversion rates, smaller deal sizes, and lower add-on installed base sales resulted in a FQ1 bookings shortfall and lower FY10 rev guidance. Overall on/off balance sheet def. rev remained ~flat q/q at $1.3Bn despite a 50% y/y increase in net new clients signed during the qtr (3,900 new clients vs. 2,600 last yr) – ASPs were clearly under pressure. It is surprising to see such low conversion rates considering overall headcount expanded by 26% y/y, suggesting the overall macro slowdown has finally caught up with CRM. While we believe the positive L-T thesis is intact for CRM’s leading on-demand offering, stock will likely be under pressure until these negative trends abate.”
  • Salesforce.com 1Q profit nearly doubles
    Sales management software maker Salesforce.com said Thursday its first-quarter profit nearly doubled as sales grew 23 percent, but it again lowered its revenue guidance for the full year, sending shares tumbling in late trading. The company said it earned $18.4 million, or 15 cents per share, during the quarter that ended March 31, up from $9.6 million, or 8 cents per share, during the same period last year. Revenue rose to $304.9 million from $247.6 million a year ago, as subscription and support revenue rose 25 percent to $281.8 million, and professional services and other revenue edged up 4 percent to $23.1 million. The results beat expectations of analysts surveyed by Thomson Reuters, who were expecting profit of 11 cents per share on revenue of $304.7 million.
  • Slowdown seen at Salesforce.com
    “Salesforce.com reported a soft quarter, with lower-than-expected deferred revenues and bookings,” FBR Capital Markets analyst David M. Hilal said in a note Friday. Hilal said those factors “overshadowed” better earnings and cash flow. He rates the stock “Underperform.” “Bookings slowed for the fifth straight quarter, and guidance slashed revenue expectations for” fiscal 2010, Roth Capital Partners analyst Nathan Schneiderman told clients. He kept a “Hold” rating on shares, but raised his price target to $36 from $30 on strong earnings.
  • Learning from Satyam: How to Detect Fraud
    Since the criminal proceedings and the restatement of Satyam’s consolidated financial statements are still under way, the underlying facts and circumstances of Satyam’s fraud are not completely transparent yet. Perhaps the strength of the company’s reported numbers concealed the imploding financial situation. Two plausible scenarios arise: One, the cash reflected in the cash and bank balances was fake from the beginning; or two, that the cash was genuine but was subsequently misappropriated.
  • John Chen talks Sybase, Larry Ellison, and Sun
    John Chen, Sybase CEO for the past 11 years, told analysts that he and Larry Ellison have a long history in a talk on analyst day at the New York Stock Exchange last week.
  • Tech companies look for deals as values fall
    Cheap valuations and glimmers of economic recovery are tempting cash-rich technology companies to seek acquisitions, and the second half of 2009 could see some steady dealmaking. Having assessed the damage to their balance sheets — at least for now — from the recession, tech companies from behemoths like IBM to niche players like NetSuite Inc are turning their attention to new growth opportunities.
  • Oracle & Google: Of Goats, Grids and GRI
    This is good news for sustainability truly but it also raises the pressure threshold on both Google & Oracle when it comes to their own sustainability management arrangements. Watch for Oracle and Google to play catch up & we may even soon see both companies publish their own full CO2 footprint as well as set reduction targets just like their customers. We’ll likely too see publication of GRI standard sustainability reports. And for Google this may well mean an advancement of the corporate environmental strategy even beyond the goat herd.
  • To SaaS or Not, Is That a Question? – SaaSy Discussions (Part IIa)
    The third assumption is that SaaS is priced as a utility model, which is almost always false. Although the claim is that companies are only charged for what and how much software they actually use, for most SaaS deployments, a company must commit to a predetermined contract, independent of actual usage. If any company really wants utility pricing, then it should demand that the SaaS vendor charge, e.g., per each sales quotation, order, or shopping cart checkout (in case of using an on-demand sales configurator) or per individual case (in case of using an on-demand case management software). However, to be fair to vendors, it is interesting to note how many customers are still afraid of using this pricing model per se.
  • BMW Oracle to use new boat in next year’s America’s Cup
    Instead, a second craft is being constructed at the team’s facility in Anacortes, Washington State where work started in March. It is intended that this boat, to be named USA, will be launched this summer. The American team, owned by Larry Ellison, has gleaned considerable experience from its earlier boat and has converted that into its newer design. The American team and the Swiss defender, Alinghi, have bases in Valencia, but it is far from certain that the Cup will be held there.

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