A good article in the S.F. Chronicle today.
sfgate.com
Tibco Provides Net's Guts So Others Get Glory. Palo Alto firm thrives behind the scenes
Tom Stein, Chronicle Staff Writer
Monday, September 27, 1999
The Internet has given birth to a multitude of cool
companies that allow people to play games, buy
groceries, hunt for apartments and pay their bills
online.
Tibco Software Inc. of Palo Alto is not that kind of
Internet company. It is a behind-the-scenes player
that makes the unglamorous, yet critically important,
software used by such leading Web sites as Yahoo,
Lycos and CBS SportsLine.
''We provide the plumbing that makes e-business
possible,'' said Tibco chief executive Vivek
Ranadive. ''We take pride in that. There are lots of
companies doing really cool stuff on the Internet,
but we're not one of them. We do the hard, boring
work.''
Tibco makes what it calls ''event-driven, publish
and subscribe'' software. It's a mouthful, but
basically the software connects disparate computer
systems, so that information can be seamlessly
transported from point A to point B.
Yahoo, for example, uses Tibco to provide its users
with instant, up-to-the-second stock quotes. With
the aid of Tibco's software, Yahoo can pull
real-time stock market data from a variety of
sources and distribute it to users whenever they
request it. ''Every time someone looks at a Yahoo
stock quote, we get a penny,'' said Ranadive.
CBS SportsLine, an Internet destination for sports
fans, uses Tibco to gather sports scores and
breaking news from a host of sources such as the
Associated Press and Reuters. It then feeds the
data into its online scoreboards and news stories.
Tibco also provides the backbone of SportsLine's
multimedia applications. Baseball fans, for instance,
can watch simulated versions of live ballgames over
the Internet. Every time Sammy Sosa hits a home
run, viewers can see an animated version of the
famous slugger round the bases in real time. Tibco
software goes out and gathers pitch-by-pitch data
that's typed in as it happens and transports that
information to the Web site to be transformed into
simulations.
''Tibco is a core piece of what we do,'' said Dan
Leichtenschlag, senior vice president of operations
at CBS SportsLine. He wouldn't reveal what his
company paid for the technology, but a typical
Tibco sale is about $400,000 per customer.
Tibco CEO Ranadive, 41, is something of an online
pioneer. He first made his mark on Wall Street as a
tech wunderkind in the mid-1980s. At that time, it
was not uncommon for traders to have 15 separate
monitors on their desks, each overflowing with
stock prices, news stories and financial data.
Ranadive, who had just formed a company called
Teknekron, devised a software system to
consolidate all this information on a solitary desktop
computer and thus give traders a centralized view of
pertinent data.
His system caught the attention of large investment
firms like Goldman Sachs and Salomon Brothers.
Pretty soon, nearly every major financial institution
was using the technology.
In 1994, Ranadive sold the company to Reuters for
$125 million. But he was unwilling to take the
money and run. He was convinced the technology
had applications far beyond Wall Street.
In 1995, Ranadive formed Tibco and convinced
Reuters to take a majority stake in the new venture.
A year later, Cisco acquired 10 percent of the
business. All told, the investors pumped nearly
$400 million into Tibco to enhance the core
technology and tailor it to the Internet.
Harry Tse, an analyst with the Yankee Group in
Boston, believes Tibco is now well positioned to
grab a big slice of the Internet pie, especially as
more and more companies look to build complex,
second-generation Web sites.
''After dealing with demanding customers on Wall
Street, Tibco has developed a robust technology
architecture needed to handle high traffic volume
and heavy content distribution,'' he said.
Sportsline's Leichtenschlag agrees that Tibco's
technology is ready for prime time. He said most
Internet technologies are a constant source of
aggravation because they are new and untested.
''Tibco is one of the very few products we use that
is commercially solid,'' he said. ''We've had no
problems with bugs or the technology breaking
down like we've had with other Internet products
we use.''
Tibco, which currently has about 300 customers, is
growing at break- neck speed. It posted
third-quarter revenue of $24 million, a 121 percent
increase over the year-earlier period. Yet the
company has yet to turn a profit. It racked up a
third- quarter loss of $1.9 million.
But as with most Internet companies, the flow of
red ink has not prevented Tibco from going public.
In July, it offered 9.2 million shares to the public,
raising approximately $124 million from the offering.
Tibco finished trading Friday at $29.88 per share
and had a market capitalization of about $1.75
billion. Ranadive said the company should be
profitable by the fourth quarter of next year.
Meantime, Ranadive has just published a book
about his adventures in Silicon Valley. Called ''The
Power of Now,'' the book aims to teach business
managers and aspiring entrepreneurs how to
operate a company in the Internet age.
Some of Ranadive's advice may raise eyebrows.
For instance, he takes the contrarian viewpoint that
it's better to hire prima donnas than team players.
''I don't want people who just agree with everyone
else,'' he said. ''Old-style consensus is a bunch of
BS. I want people who are smart, and most smart
people are prima donnas. That's a fact of life.''
As for his management style, Ranadive believes in
letting his people roam free and take risks. ''In the
past, most companies were as rigid as a marching
band,'' he said. ''We want more jazz music -- that
means letting our people go out and do their own
thing.''
Tibco, it seems, is a company that marches to a
different drummer. |
