Qlik’s Strategy Of Improving Enterprise-Grade Capabilities Is Starting To Pay Off

-7.48%
Downside
30.50
Market
28.22
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QLIK: Qlik Technologies logo
QLIK
Qlik Technologies

Qlik Technologies (NASDAQ:QLIK) is an innovative Business Intelligence (BI) software company, which provides its clients with tools and interactive dashboards to search, query, analyze and visualize chunks of data to generate useful business insights. The company has focused on enhancing its enterprise-grade capabilities in the recent past and is beginning to reap rewards in the form of data-heavy clients such as the National Collegiate Athletic Association (NCAA). Our price estimate for Qlik stands at $33.01, implying a discount of about 5% to the market.

See our complete analysis for Qlik

Qlik’s Efforts Are Starting To Bear Fruit

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Qlik has closed two major deals which demonstrate the company’s growing clout in enterprise-grade analytics. The company recently announced that that it will help in disseminating the large amount of official sports statistical information for the NCAA Men’s College World Series via NCAA.com. [1] As per the announcement, Qlik will collaborate with Turner Sports to make the information directly available to fans. Fans following this year’s College World Series will be able to access interactive statistics through the Qlik-powered app, which has already gone live on NCAA.com. The app will offer a simple, personalized and interactive experience, enabling fans to visualize, analyze and compare history and results, explore different athletes, teams, etc. NCAA’s confidence in Qlik’s abilities to handle large voluminous data is a testament to Qlik’s growing enterprise capabilities.

Qlik had earlier announced that OEM partner and information intelligence leader Recommind has chosen to integrate Qlik Sense into its pioneering cloud-based eDiscovery platform Axcelerate. [2] Axcelerate combines enterprise-grade business intelligence with eDiscovery, enabling Recommind’s clients to interact, explore and visualize information. Recommind services several data-heavy clients including AstraZeneca, BMW, Cisco, the U.S. Securities and Exchange Commission (SEC), the U.S. Department of Energy (DOE), Clifford Chance, Swiss Re, Marathon Oil, Morgan Lewis, White & Case and WilmerHale. Qlik Sense’s integration with Axcelerate will offer Qlik valuable exposure to some of Recommind’s biggest clients. The company will gain insight into what sort of software data-heavy clients prefer and the company can use this knowledge to refine its development process.

Result Of Greater Focus On Enterprise-Grade Capabilities

Qlik is considered a pioneer in the field of data discovery. Data discovery involves discovering insights from a set of data and analyzing and presenting those insights in interactive and visual format, which makes it easy for business users (non-IT) to run queries and analysis. The greater emphasis on the ease of use and visualization when it comes to business intelligence software has fueled growth for Qlik. However, that does not mean that enterprise requirements can be ignored. According to IDC, the worldwide business analytics market generated $37.7 billion of sales in 2013 and is expected to grow to around $59.2 billion in 2018. [3] This translates to a 9.4% compounded annual growth rate for the forecast period. Gartner introduced the concept of governed data discovery and it refers to platforms that can address enterprise-level IT requirements as well as assist business users (non-IT) in data discovery. No vendor has addressed both these aspects so far but there is an indication that this convergence will happen. Governed data discovery strives to find the right balance between allowing creativity, so that end users can experiment with the data, and maintaining just enough centralized control so that the enterprise tasks can run smoothly. In keeping with this concept, Qlik is introducing more enterprise related features with its new product Qlik Sense Enterprise 2.0, including data reuse, data governance and control, and scalability. [4] Qlik Sense Enterprise 2.0 will inculcate a modern, platform-based approach and will span multiple use cases throughout the client’s organization, including self-service data visualization, reporting and dashboards, guided analytics, embedded analytics, etc. Based on the patented QIX Associative Indexing Engine, the software will be have the most advanced enterprise-grade capabilities Qlik has ever offered.

Additionally, Qlik’s in-memory computing (IMC) technology is complementary to governed data discovery. It reduces the number of data transactions required while analyzing data by storing the entire database in random access memory (RAM), which directly interfaces with the processor. The IMC engine calculates aggregations rapidly and maintains associations in the data, which makes the analysis faster and more real-time. According to Markets and Markets, in-memory technology market will increase from $2.2 billion in 2013 to $13.2 billion by 2018 due to a decline in the cost of semiconductor technologies and rising need for real-time data analysis and managing voluminous databases. Qlik has also launched a cloud based platform which reduces the complexities of infrastructure and storage space requirement. Including new features that enable the product to handle a vast range of functions will allow Qlik to increase its pricing. Qlik closed 556 contracts exceeding $100,000 in fees in 2014, compared to 511 contracts in the previous year. [5] Consequently, we forecast that Qlik’s average revenue per customer will remain around current levels of $9,250 in the near future and will eventually grow to just shy of $10,000 by 2021.

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Notes:
  1. Qlik’s Got Game: Powers Visual Analytics for College Baseball Fans, June 17, 2015, BusinessWire []
  2. Qlik and Recommind Bring Data to Life with Visual Mapping Technology, May 14, 2015, Qlik Press Release []
  3. IDC Worldwide Business Analytics Software 2014–2018 Forecast and 2013 Vendor Shares, IDC []
  4. Qlik Introduces Qlik Sense Enterprise 2.0, April 27, 2015, Qlik Press Release []
  5. Qlik’s SEC Filings []