Informatica going strong despite downturn

Data integration specialist Informatica has released positive fourth-quarter results, in an economic climate where it is fast becoming the norm for tech firms to report a significant loss.

The quarter ended 31 December 2008 generated US$124.4m (£86.3m) in revenue for the company, a nine per cent rise on the same period last year. Profit remained largely flat, decreasing slightly from US$20.6m to US$19.9m (£14.2m to £13.8m).

"Our results, with a more than 400 basis point increase in annual operating margins, again demonstrate the operational discipline of the Informatica team to navigate the economic turmoil," said Sohaib Abbasi, Informatica chairman and chief executive.

"We are well prepared to pursue our strategy and continue to focus on operating income in the quarters to come."

However, financial analysts said at Informatica's annual customer and partner event in Las Vegas last year that the positive revenues and growing customer base may not be enough to fend off an acquisition from a major player.

"There is a likelihood that Informatica will be bought because, while they have reached a US$500m [£346m] revenue, the next step [to compete with the major technology giants] would be a US$1bn [£693m] revenue. That is a lot of money for a data integration firm to earn," said an associate analyst from Citi's Software Equity Research division.

Abbasi announced new offerings at the event, which he said would guard Informatica's independence by helping it remain competitive in the software and services market.

The company's entry into the software-as-a-service arena with a new Data Loader Service, for example, will allow business users to integrate off-premise data managed by Salesforce.com with their on-premise data.

Additionally, the firm's updated Informatica 8.6 platform offers new identity resolution capabilities acquired through the recent purchase of Identity Systems.

Forrester Research analyst Rob Karel believes that Informatica's expansion into new areas may help it achieve revenue that secures its independence.

"It is interesting how they are butting heads with companies like business integration and process management software company Tibco. It is difficult to find out where Informatica starts and the other begins," he said.