MicroStrategy knows you need the details to make a good plan. The company's cloud-based business intelligence software addresses functions such as building reports and dashboards, managing mobile applications, and capitalizing on social media. Specific analytics modules include human resources management, Web traffic analysis, and sales and distribution. It sells to many of the world's largest companies, such as Aetna and eBay, as well as midsized companies and government agencies, such as NASA and the US Army. MicroStrategy also offers consulting and support services. Founded in 1989, MicroStrategy has operations in about 25 countries.
MicroStrategy gets about three-quarters of its revenue mainly from product support (51% total revenue) and other services (23%). Product licenses generate 22% of revenue with subscriptions accounting for 4%.
North America is the Virginia-based company's largest market, accounting for 60% of its revenue. Europe, the Middle East and Africa accounts for about 30%. The rest of sales are scattered around the world.
Sales and Marketing
Marketing its products worldwide, MicroStrategy targets a variety of user types. In addition to large and medium-sized enterprises and government customers, the company also targets advertising agencies and systems integrators that cater to those clients, as well targeting independent software vendors that want to incorporate MicroStrategy's tools. The company primarily uses a direct sales force, but it also distributes through indirect channel partners that include value-added resellers, system integrators, and OEMs.
The company's revenue inched up 0.6% to just under $580 million in 2014 from 2013. While subscriptions are just a small part of the company's revenue stream, they jumped 82% in 2014 from new customers going with the subscription model and an increasing number of current customers switching to the company's cloud services. Product support revenue rose $18 million in 2014 from new product and premium support contracts and renewals.
The 94% drop in net income in 2014 (to $5 million) doesn't look good compared to the more than 300% increase posted in 2013. But in 2013, the company profited from tax benefits and the sale of its Angel.com unit in 2013. The tumble in 2014 net income was attributed to restructuring costs and the loss of revenue from discontinued operations. The company also had higher cost in sales and marketing and R&D in 2014.
While MicroStrategy restructured, eliminating almost 800 jobs in the process, it reoriented toward security offerings in 2014.
The company's product release was MicroStrategy 9s, a comprehensive platform designed to ensure the security of a company's information. MicroStrategy 9s works with other company products and adds greater authentication security, enhanced user administration, and user authentication tracking.
Another security product, MicroStrategy Usher, is designed to eliminate passwords and keycards and improve cyber-security by using digital badges issued via smartphone, geo-fenced environment access, time-fenced access restrictions, and Touch ID access on mobile devices.
MicroStrategy has faced increasing competition from large enterprise software companies such as Oracle, SAP, and IBM as those companies acquire smaller business intelligence software makers in deals similar to IBM's purchase of SPSS. Despite the competitive relationship with these companies, MicroStrategy also works through partnerships with them and many others, including Leidos, Symantec, and Adobe.
MicroStrategy serves such industries as communications (Sky plc, Cox Communications), consumer goods (Chiquita, Danone), financial services (ABN AMRO, Credit Agricole), healthcare (Bayer HealthCare, Novation), insurance (Pacific Life, GEICO), manufacturing (Michelin, Philips Electronics), retail (Starbucks, Guess?), technology (eBay, McAfee), and the government (US Postal Service, US Department of Homeland Security).