BI (business intelligence) vendor Qlik Technologies' upcoming IPO (initial public offering) is garnering significant interest from investors, despite the general damper tech IPOs have faced of late due to the economic climate.
QlikTech first announced its IPO plans earlier this year. In a June 28 prospectus filed with the U.S. Securities & Exchange Commission, QlikTech said it is offering 11.2 million shares of common stock and anticipates the initial price to be between $8.50 and $9.50. Trading of those shares is expected to begin Friday, according to a spokesman.
The IPO is "heavily oversubscribed," meaning there is greater demand for shares than the number being offered, said Scott Sweet, senior managing partner of the analyst firm IPO Boutique. It's likely that the share price will come in at the high end of QlikTech's projected range, Sweet added.
Sweet cited QlikTech's "exponential growth" as a reason for the interest. Its revenue grew from roughly $81 million in 2007 to $157 million in 2009, and it has 13,000 customers, according to the SEC filing.
Another key indication is that the "vast majority" of companies that undergo 30-day trials of its software immediately sign deals afterward, Sweet said. Client retention is also strong, he said.
The company was originally formed in Sweden in 1993 and initially focused on European markets, but began targeting the U.S. in 2004. Its customers include Campbell's and Qualcomm.
Meanwhile, QlikTech competitors such as Actuate will be watching Friday's market closely.
Actuate, which underwent an IPO in the late 1990s, welcomes QlikTech's move to join it in challenging "the inefficiencies and lack of innovation of the BI mega-vendors," Senior Vice President of Marketing Nobby Akiha said in a statement. But he went on to claim that QlikTech's technologies aren't broad enough.
Despite the buzz, QlikTech will face some challenges, Ovum analyst Helena Schwenk said in a commentary released earlier this year. "The step up to the higher-end enterprise market will put its platform under the scalability and performance spotlight, particularly when it is being deployed in large, mixed-load environments," she wrote.
Enterprise customers will also look for BI vendors "to provide extensible functionality in areas such as predictive analytics and data integration and data quality," she added. "These are areas that QlikTech does not address -- though the funds raised from its IPO might well put the company on an acquisition trail."
QlikTech plans to expand its platform to "adjacent areas where data-driven decisions are critical, including website navigation, content search and information management, external data communication, product configuration and e-commerce applications," according to the SEC filing.
It would be inadvisable for QlikTech to buy up other BI components, according to another observer.
"I don't really think they should be positioning themselves for direct, head-to-head competition with the big guys," said Forrester Research analyst Boris Evelson. "In the end, I think they will become an acquisition target."
QlikTech's approach to BI, which incorporates in-memory technology, doesn't depend on "rigid, pre-built data models" and therefore makes it easier for end-users to navigate through and analyze information, according to the vendor.
It is similar to products like Tibco's Spotfire and Microsoft PowerPivot, Evelson said. Therefore, QlikTech should focus on refining and differentiating its technology instead of building out a BI stack, which would make it less attractive to larger vendors, he said.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com