Shares of RightNow Technologies (RNOW) were flat in recent after hours trading, even as the company reported better-than-expected earnings for the first quarter.

The software and cloud computing firm said diluted earnings per share came in at 4 cents, while non-GAAP diluted earnings were 10 cents a share, compared  7 cents in the year-ago period and 8 cents analysts had forecast. Revenue rose to $52.3 million, squeaking past the consensus of $52.1 million.

For the second quarter, RightNow sees earnings of 12 cents a share, a penny ahead of estimates, on $54 million in revenue, in-line with analysts’ forecasts. Full year revenue estimates of $226 million were also just ahead of the consensus.

The company said that new and recurring business came from companies including Activision (ATVI),  Cabela‘s (CAB) , CyberDefender (CYDE), DeVry (DV), Electronic Arts (ERTS), Ellie Mae (ELLI), Equifax (EXF), and Logitech (LOGI), among others.

Barrons.com spoke with CEO Greg Gianforte after the earnings release. He says the company’s quarter was very solid, with recurring revenue growth–”the best indicator in the industry”–up 27%. He’s not concerned about the market’s tepid reaction: “We’re one of the fastest growing cloud application companies in the industry…and the stock is up more than 75% in the last year, so a little adjustment [in the price after hours] isn’t a concern in light of the full year performance.”

Despite the stock’s run, he is also optimistic that the shares will continue to grow going foward, given the large addressable business-to-consumer market. (RightNow helps large companies reach out to consumers and improve their experiences over web, social and contact center platforms.) “I’ve done over 90 individual customer visits this year to big companies from DirecTV to Nike, and what they’re telling us is that consumers are getting more frustrated,” Gianforte says.  “The core differentiation [between large consumer companies] is tied to the experience they deliver to customers, and they must do this over new emerging social and mobile channels, as well as contact centers. To do that piecemeal leaves an empty taste in consumers’ mouths. So that’s the primary driver of our business. We realized we’ve spent 13 years investing in solutions, and there is massive market opportunity, so we’re going to push the accelerator down [on sales and distribution] all while expanding operating margins. I believe the recognition the stock is getting in the market is tied to that continuing top line growth.”

Of course, cloud computing and customer relationship management (CRM) is a crowded field, and RightNow has larger competitors, like Oracle (ORLC) and Salesforce.com (CRM).  However, Gianforte notes that the firm’s services are unique in the industry: “Oracle continues to use an outdated model. They have everything [set up for] on-premise deployment, they sell perpetual licenses, they have not embraced the cloud. Because we do everything on the cloud, our system is going faster and costs less to own, so that’s a significant advantage. Companies like Oracle and Salesforece.com have a more traditional approach to CRMt; they have focused primarily on internal improvements, making employees inside a company more efficient, while we make consumers more effective. That’s why we focus on consumer experience, it’s a bigger market than traditional CRM, and it includes components that aren’t even available from other vendors.”

Article courtesy of Tech Trader Daily

Shares of Oracle (ORCL) were off after hours, as tech giant said its president would also take on the CFO role.

Safra Catz will take over the role immediately and permanently, the company said in its press release, following the resignation of Jeff Epstein, who reported to Catz. She has been at Oracle for more than a decade, served as president since 2004, and is no stranger to the CFO role, which she held from 2005-2008. Oracle did not say why Epstein, who served as CFO since 2008, was departing.

The move comes one month after the firm’s better-than-expected first quarter earnings report.

The stock fell 1.2% to $34.40, after Oracle had gained 0.2% during regular trading hours.

Article courtesy of Tech Trader Daily

Shares of Lawson Software (LWSN) are higher by 34 cents, or 3%, at $12.09, following analyst reports late yesterday saying the company may be an M&A target of Oracle (ORCL) following a bid on March 11th by privately held enterprise software firm Infor and private equity firm Golden Gate Capital.

An article by Bloomberg’s Tara Lachapelle late yesterday notes that Oracle could be interested in Lawson’s medical records and supply chain management software.

I would note that Lawson’s management was scheduled previously to visit Barron’s this week and canceled yesterday afternoon.

Article courtesy of Tech Trader Daily

Oracle and Intel are in a high-stakes spat over the future of Intel’s Itanium chip. Oracle announced last night that it had stopped all development on Intel’s Itanium, a 64-bit heavy-duty computing microprocessor, because Intel expressed weak support for it. Intel’s chief executive shot back that Intel fully supports Itanium.

In a press statement, Oracle said, “Intel management made it clear that their strategic focus is on their x86 microprocessor and that Itanium was nearing the end of its life.” That’s a big blow to Intel’s high-end computing investments, since Intel has invested billions of dollars in the program since 1994. At stake is the future direction of the high end of chip technology.

Oracle has its own interests at heart. Oracle now owns Sun Microsystems, a hardware and chip business that is now run by co-president Mark Hurd, former CEO of Hewlett-Packard. While Oracle used to be a pure software company, now it makes hardware and chips that compete directly with Intel’s Itanium chip.

But the loss of Oracle will hurt Intel, as it isn’t the only one to abandon Itanium. Microsoft and RedHat abandoned making optimized software for Itanium last year. Microsoft said that last year’s Windows Server 2008 R2 was the last operating system to support the Intel 64-bit chip, while RedHat’s final support was Enterprise Linux 6.

HP-UX remains the only big supporter of Itanium, from an operating system view. HP dominates the market for Itanium-based servers. Talking to Cnet, Oracle CEO Larry Ellison said five years ago, “There is no more important platform for Oracle than HP and Itanium.”

During his own strategy talk last week, HP CEO Léo Apotheker didn’t say anything about Itanium. But Intel is still promoting its next-generation Itanium chips, as Intel CEO Paul Otellini pointed out today. In February, Intel unveiled its 10th-generation Itanium chip, code-named Poulson, a beast of a chip with 3 billion basic components known as transistors.

“We remain firmly committed to delivering a competitive, multi-generational roadmap for HP-UX and other operating system customers that run the Itanium architecture,” Otellini said.

The Itanium has had a long rollercoaster history. Started as a joint venture with HP in 1994, the first chip was a relic of an age when power consumption didn’t matter. It was supposed the debut in 1999, but the code-named Merced chip finally came out in 2001, just in time for the post-9/11 recession. Intel’s primary competition was its own 32-bit Xeon chips, which were faster at running 32-bit software than the 64-bit Itanium was. So the great migration of computing from 32-bit to 64-bit didn’t happen for the masses, as had originally been expected, and Intel added 64-bit technology into its Xeon line-up.

Intel continued to invest, challenging the shrinking number of players in the reduced-instruction set computing (RISC) computing business such as Sun Microsystems and IBM. Intel says that it is still attacking the $15 billion RISC market with Itanium. Meanwhile, Advanced Micro Devices seized its chance to get a foothold in 32-bit server chips and it has succeeded in grabbing a chunk of that market.

Intel’s new Itanium chip, code-named Poulson, is slated to come out some time in the future, as will another one code-named Kittson. Otellini said those chips are on schedule.

Tags: Itanium

Companies: HP, Itanium, Microsoft, Oracle, Redhat, Sun Microsystems

People: Larry Ellison, Mark Hurd, Paul Otellini

Article courtesy of VentureBeat » deals

Last Friday, the Federal Reserve gave Goldman Sachs the greenlight to buy back the $5 billion of preferred stock Berkshire Hathaway bought when things got dicey in 2008. Though he knew the day was coming, Buffett was not looking forward to the news, as the terms of the investment were highly favorable for the Oracle of O, netting him more than $15 dollars a second. Over the weekend Buffett confirmed his displeasure and sent a message to Lloyd and Co that if they want their preferred shares back they’re gonna have to find him first, which will prove difficult, as he’s decided to take a page from from Osama bin Laden’s playbook.

Billionaire investor Warren Buffett warned that he would go to great lengths to avoid having his preferred shares in Goldman Sachs called in by the investment bank. Now he seems to be making good on his threats. On Saturday, Buffett boarded a private jet bound for Daegu, South Korea. “I’m going to be the Osama bin Laden of capitalism. I’m on my way to an unknown destination in Asia where I’m going to look for a cave,” he joked. “If the U.S. Armed forces can’t find Osama bin Laden in 10 years, let Goldman Sachs try to find me.”

This of course fails to take into account that if Goldman was the one tasked with finding ObL it would’ve been a done deal in about 36 hours but nevertheless, challenge accepted?

Article courtesy of Dealbreaker

DEMO Fall 2010 conference alumni Profitably, a provider of online business analytics software, has raised a funding round worth $1.1 million led by White Owl Capital.

Traditional business intelligence and analytics programs, such as the ones offered by Oracle and SAP, are popular with larger corporations but are typically much more expensive — too expensive for smaller businesses. That’s where Profitably steps in by offering accounting and analytics software at a much cheaper rate than larger analytics and accounting services.

The company launched an early version of its service at DEMO Fall 2010 in Santa Clara, Calif. last year — but it was an early version of the product and the team was still hard at work on a number of new features. Profitably also works extensively with Intuit to integrate with its Workplace service, a collection of apps for managing small business accounting.

“We launched a very early product, and there are just a ton of features that people want to see,” said Adam Neary, the company’s chief executive. “We just can’t write these things fast enough, so we needed to raise funds to keep this party going.”

Profitably still isn’t targeting the mom and pop stores — it’s geared toward small- and mid-sized businesses that actually need more in-depth analytics and can benefit from the service. The company is going after the problems a chief financial officer at a 40-person firm has, not the kind of problems a local delicatessen or retail store has, Neary said.

The company had raised an earlier seed funding round worth $300,000 in July last year led by North Bridge Venture Partners with angel investors David Tisch, Mark Birch and David Honig. David Mars of White Owl Capital will also join the company’s board as part of the newest funding round.

The New York, N.Y.-based company has four full-time employees and a number of contractors. It will add two engineers with the additional funding. The company has raised $1.4 million to date.

Article courtesy of VentureBeat » deals

The Federal Reserve stuck it to Warren Buffett today when it gave Goldman Sachs the greenlight to buy back the $5 billion of preferred stock Berkshire Hathaway bought when things got tense in 2008. As Goldman and Wall Street were in a bit of a bind at the time, Buffett was able to demand a set-up that made him more than $15 a second, or 12 pigs in a blanket from Omaha Steaks. Goldman was and is extremely appreciative of the help but now that things have calmed down and the firm is back to making it rain ka-ching on each other’s faces and the terms of the investment (special dividend payments of 10% a year on the bank’s preferred stock, plus warrants to buy shares of Goldman at $115/share) are, how to put this in a way WB will understand, like having the twin Geico cavemen play tug of war with your testicles– nice/somewhat intriguing under extraordinary circumstances/unusual dry-spells but fairly uncomfortable and not a place you want to be after the first or second yank, Lloyd and Co are happy to put the experience behind them.

The purchase includes a 10 percent premium on Buffett’s original $5 billion investment, a $125 million first-quarter dividend, and $24 million in accelerated dividends, said Stephen Cohen, a spokesman for the New York-based company. The redemption will cut first-quarter earnings per share by $2.84, the bank said in a statement today…The repayment to Buffett will also free Goldman Sachs’s top executives from a requirement that they retain 90 percent of their stock.

Being an Oracle, Buffett knew this was a long time coming, telling shareholders in his latest letter to brace themselves for the gravy train to be over but it doesn’t mean he has to like it.

Goldman Sachs Will Buy Back Buffett’s $5 Billion Preferred Stake [BW]

Article courtesy of Dealbreaker

Piper Jaffray’s Mark Murphy this morning reiterated an Overweight rating and a $36 price target on shares of Oracle (ORCL), writing that conversations with 32 distribution partners for the software maker show the company’s “Exadata” line of database appliances “building at a phenomenal rate.”

Exadata could account for 5% of Oracle’s revenue in the next one to two years, the firms Murphy spoke with opined. That would be a $1.7 billion business, he notes.

Those resellers “finished 3% above plan for Q3,” he writes, referring to Oracle’s fiscal Q3 that ended in February, with 66% of respondents noting that the pace of business was better than it was previously.

“As a reminder, we believe Oracle has sold Exadata to less than 1,000 customers at this point, and yet the pipeline has ballooned from $500M to $2B in a year,” writes Murphy. “Initial transactions have typically involved a quarter-rack purchase, but second-round activity may involve 5 or 10 full racks at a time.”

Murphy sees Oracle’s data center incursion hurting other IT vendors.

Article courtesy of Tech Trader Daily

Hewlett-Packard (HPQ) shares are up 24 cents, or 0.6%, at $41.89 as the company hosts a “strategy summit” between CEO Leo Apotheker and analysts, the first real “big picture” pow-wow Apotheker has had with the Street since he was named to the job last October.

A few analysts on Friday offered their views on what to expect today:

Baird & Co.’s Jayson Noland, who has an Outperform rating on the stock, wrote that he’s expecting “an update on its [HP's] long-term strategic vision, including thoughts on M&A, cross-divisional synergies, revenue growth, and the data center opportunity.”

Revenue growth, however, may threaten the bottom line, notes Noland.

Among potential areas of software acquisitions, Noland focuses on “infrastructure management,” “data management,” and “analytics” as the areas he thinks are most of interest to the company.

Noland has a $55 price target on HP shares.

On that last score, Amit Daryanani with RBC Capital Markets wrote on Friday that HP gets just 3% of revenue from software, versus IBM (IBM) at 20% and Oracle at 65%. “Investors will look for clarity around the nature and segments of software deals, the valuation discipline around deals, and targeted revenues from software,” writes Daryanani.

He expects HP will be pressed to explain how it will fix issues in its services business given hiccups in the most recent quarter.

And like Noland, he expresses concern on the profit front. To wit, cost controls have been a “hallmark” of HP for years. “There is concern that the paradigm has shifted under a new CEO,” he writes, and what’s needed is some clarity about how selling, general & administrative costs may rise.

Daryanani is not expecting any update on financial metrics. He has an Outperform rating on the stock and a $56 price target.

BMO Capital’s Keith Bachman wrote that the focus should be on “management strategy and focus,” the ability to achieve 2011′s company forecast, how much operating expense will impact margins, and the role of M&A. Bachman sees the event, however, as “neutral” for the stock, as “we think HP will need to hit several quarters to warrant multiple expansion.”

Bachman reiterated an Outperform rating on HP shares and a $52 price target.

Update: Interestingly, a couple of outlets chose today to focus on IBM’s outlook. Bloomberg’s Katie Hoffman this morning points out that IBM has “hit its longest stretch without an acquisition in almost eight years,” noting that the company hasn’t done a deal since October of last year, and that in another 15 days, it will be the longest “dry spell” since Sam Palmisano became CEO. And the Financial Times’s Richard Waters writes today that IBM’s head of services, Mike Daniels, boasts that the company is “years ahead” of HP in integrating services and software.

Article courtesy of Tech Trader Daily

Carl Quintanilla's pick

Related, according to The Oracle, Berkshire Hathaway-owned Fruit of the Loom’s motto is “We cover the asses of the masses.”

Article courtesy of Dealbreaker