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Informatica An Even More Attractive Target For Oracle

Posted on Tuesday, Mar 22nd 2011

The data integration market is attracting big-name players. Last year, Dell acquired Boomi, a SaaS integration leader, and IBM acquired Cast Iron, a cloud computing integration company. Although Oracle hasn’t made any purchases recently, the market remains abuzz with rumors that Informatica may be at the top of its list. As I have mentioned earlier, this would be a move that would benefit Oracle significantly by helping it build on its in-house data quality, profiling, or metadata solutions.

Informatica’s Financials
Informatica’s (NASDAQ:INFA) Q4 revenues grew 31% over the year to $198 million driven by 40% growth in license revenues, which increased to $100.2 million. Earnings of $0.39 grew 25% over the year.

The company ended the year with revenues increasing 30% over the year to $650.1 million. License revenues grew 3% over the year to $295.1 million. For the year, Informatica earned $1.13 per share.

The company projects the current quarter’s revenues to be $160 million–$165 million with EPS of $0.24–$0.26. The market was expecting EPS of $0.25. For the year, Informatica has projected revenues of $735 million–$755 million with EPS of $1.23–$1.33. The Street had projected the year’s revenues at $740.3 million.

Informatica’s Cloud Expansion
As part of its cloud computing efforts, Informatica partnered with NetSuite to provide the first ever cloud computing-based solution for deploying two-tier enterprise resource planning (ERP) systems. A two-tier ERP infrastructure enables enterprises to set up global divisions and subsidiaries by using the existing on-premise ERP solution as the hub and operating more flexible and cost-effective cloud ERP solutions, such as the NetSuite OneWorld, at the subsidiary or divisional level.

Earlier last quarter, Informatica also tied up with Cloudera, the leading provider of Apache Hadoop-based data management software and services. Through the agreement, the two companies will provide solutions needed to manage large-scale data by combining the benefits of the Informatica Platform with the data-intensive computing capability of Hadoop. Apache Hadoop is an open source framework for scalable and distributed computing and data storage.

Informatica’s stock is trading at $47.86 with a market capitalization of $4.5 billion. It touched 52-week year high of $49.77 earlier last month.

As you have read in our Thought Leaders in Cloud Computing interviews repeatedly, integration and analytics are both recurring themes, and Informatica has strong offerings in each category. If I were to speculate, I’d say, in 2011, Oracle will most likely go for Informatica.

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