“The Two Titans of Business Intelligence” — Motley Fool

By Travis Johnson, Stock Gumshoe, July 29, 2009

“How to multiply YOUR wealth with the behind-the-scenes technology Fortune 500 CEOs are quietly riding to record profits…

“Experts call it “the new science of winning.” The Economist says it’s “a golden vein.” FedEx, Capital One, Amazon, and even the Boston Red Sox can’t function without it.

“Now a team of professional opportunity-seekers has uncovered a backdoor way for you to use this technology to secure life-changing investment returns.”

That’s how the latest ad for the Motley Fool’s Stock Advisor newsletter opens — and they then go on to give a long description of the process and promise of “business intelligence,” the data mining and collating process that corporations rely on to understand their customers and their businesses.

Of course, if you’ve been reading the papers you’ve probably already seen that the small(ish) software companies in the “business intelligence” sector are heating up a bit — that’s because there’s some evidence that this will be the next business to see a showdown among the software giants, and whenever that happens they all go on buying sprees to pick up leading small companies who have the customers and the code (that “all” includes IBM, Microsoft, Cisco, Oracle, SAP and all the other cash-rich usual suspects in technology).

The latest deal was IBM’s offer for SPSS, which was just announced as a buyout offer with a 40% premium, so everyone got excited and bid up a few other companies as well … and actually, for a moment I wondered if the Gardner brothers had caught lightning in a bottle and actually teased SPSS just a day before it got this buyout bid, but it looks like they’ve picked other firms (including one that’s now almost exactly the same size as the beefed-up SPSS).

So who are these business intelligence firms that Dave and Tom Gardner are picking for our profitable pleasure? They won’t tell us without a subscription payment, of course, but the Gumshoe has no such restrictions. Let’s see what the clues are …

“‘The Two Titans of Business Intelligence’

“These are the two companies the Gardners are confident will dominate the rapidly growing world of business intelligence — and hand shareholders who get in now some truly life-changing investment returns.

“Granted, there are some very big fish in this relatively small pond — namely Oracle and IBM — but that’s actually a major advantage for these two companies….

“Because they are both relatively small companies it will take far less investment inflow to send their shares soaring through the roof.”

OK, so they’re little … what else?

Here’s some of the detail on Tom Gardner’s pick:

“He first recommended this company to our Stock Advisor community back in April, and it’s already soared 44% since then. But Tom insists that there’s never been a better time to snap up shares.

“… this under-the-radar dynamo turned in a brilliant 2008 — despite the economy.

“Revenues climbed to an all-time high of $1.8 billion, and it generated $400 million in cash from operations. Not to mention, net income climbed to $1.39 per share — up from $1.10 the prior year.

“Best of all, it finished the year with $442 million in the bank — and zero debt.

“This put it in such a strong financial position that it actually repurchased shares — a telltale sign that management is confident about the future, and that it puts shareholder interests first.

“Then, just last month BusinessWeek broke the news that its board had approved another $300 million in share buybacks — in addition to the $250 million it already set aside in February of 2008.

“Frankly, that’s not at all surprising. After all, this company has over 25 years of experience providing a groundbreaking technology that has allowed…

“The China Post to track as many as 800,000 pieces of mail per day
“Coca-Cola to process real-time data on over 16 million retail outlets worldwide
“The Royal Bank of Canada to enjoy direct response marketing response rates as much as 10 to 20 times the industry average.
“Continental Airlines to go from “one of the nation’s worst airlines to among the best in a 10-year span”
Overstock.com to meet its 60% annual growth goal”

This one has to be Teradata (TDC), a company I knew absolutely nothing about prior to this morning — they are a data warehousing and analytics firm, so they’re right in the heart of providing the capability to divine this “business intelligence” that has become the strongest MBA buzzword (buzzphrase?). And they do help all of those customers and dozens of other major companies.