According to Gartner’s recently released report on big data market projections, big data will account for $54.6 billion in IT spending in 2016, compared with $27.1 billion in 2011. Over this five-year period, organizations are expected to spend a total of $232 billion on big data–related services and infrastructure. Big data IT services spending will grow at an average of 10.20% annually over this period.
Big data software provider and recently listed player, Splunk (NASDAQ:SPLK) is already reaping benefits from this trend. Revenues for the recently ended third quarter grew 67% over the year to $52 million and surpassed market projections of $46.8 million. The company reported a loss of $0.01 per share, compared with a loss of $0.02 per share projected by the Street.
The quarter’s revenue growth was driven by an increase in licensing revenues. Licensing segment revenues grew 56% to $34.5 million.
For the current quarter, Splunk projects revenues of $58 million-$60 million with earnings of 3%-4%. The market was looking for revenues of $58.1 million for the quarter. Splunk expects fiscal 2013 revenues of $192 million-$194 million with a loss of -1% to -2%. The market projects annual revenues of $186.4 million.
Splunk’s Expanding Product Offerings
Splunk is working to grow its market share through deployment of improved tools. It recently announced the general availability of Splunk Enterprise 5, which is among its fastest, most resilient upgrades. The new version includes developer tools for building big data applications, provides reports and dashboards that are much faster and simpler to negotiate and share, integrate workflows, and provide a more intuitive user experience.
As part of its ongoing cloud initiative, the company also released the publicly available version of Splunk Storm, an enterprise cloud service that develops and runs applications in the public cloud.
Splunk is also expanding its market presence through tie-ups with new channel partners. Recently, it entered into a global reseller agreement with Wipro Technologies to market its products. It also announced a strategic alliance with Carahsoft Technology Corp., a government IT solution provider, that will help its systems to be proactively marketed, sold, and distributed to federal, state, and local government agencies.
It entered into an alliance with AppDynamics, Inc., an application performance management solution provider. Through the alliance, the two companies will work to provide a new approach to troubleshooting application performance issues. The agreement should help improve the ability to identify, troubleshoot, and resolve application performance issues and also increase collaboration between development and operations teams.
Many IT stocks have tanked since their IPOs, but Splunk has managed to retain its position. It listed earlier this year at a price of $17 a share. Today the stock is trading at $29.98, with a market capitalization of $2.9 billion. The stock reached a 52-week high of $39.75 in September 2012.