Vivek Ranadivé of Tibco: 'We are entering the third era of IT'

With the word ‘recession' on every-body's lips, an unprecedented collapse in the finance sector still echoing, and a year of flat IT budgets being widely predicted, you could forgive the CEO of Tibco for being a little downbeat. But Vivek Ranadivé, the boss of arguably the world's largest integration software specialist, is coming out fighting and he has some solid financial numbers with which to back himself.

Ranadivé founded what became Tibco back in 1985 and quickly made the company into an icon of middleware, as the company that sold the code that glued together the applications and business processes of the world's largest companies, helping them to gain a real-time view of operations and markets. His thesis was to create the software equivalent of a computer bus where cards can be plugged in and out to add functions - in fact, Tibco stands for The Information Bus Company.

Success was rapid, although Ranadivé's back story was somewhat different to the silver spoon background of many of Silicon Valley's masters of the universe. He was born in Mumbai and as a boy came across a TV documentary that started him dreaming of becoming a student of the Massachusetts Institute of Technology.

He eventually achieved his aim, arriving in the Boston area with little in the way of cash but a world of drive, and by the time he graduated he was running his own technology consulting firm.

Today, Tibco is a widely recognised monument in the enterprise software landscape but everybody knows that 2009 will be a challenging year for most businesses, including business technology, as Goldman Sachs forecast an eight per cent slump in technology spending in developed markets and Gartner recently slashed forecasts for sales of enterprise software to 6.6 per cent growth globally.

But as a proud technologist and frequent iconoclast, Ranadivé casts a brighter light on things.

"What we see, in spite of the economic turmoil, is actually very exciting," he insists, speaking by phone from Tibco's Palo Alto headquarters in California.

"I see IT entering the third era. In the early 1960s, the enabling technology was the mainframe and it was a two-tier architecture. With Enterprise 1.0 you had a bank with 10 million customers and a few thousand branches to support them; you'd deposit your cheque and overnight your account was updated. Software was tied to the hardware.

"In the 1980s you had client/server, which I call Enterprise 2.0. Software was no longer tied to hardware but to the database, and you had a ramp up in velocity.

"Today we're in the early stages of Enterprise 3.0, where companies have hundreds of millions of discrete events every month and maybe a petabyte of storage. We've gone from static to dynamic, from database to a dynamic enterprise service bus, ERP to end-to-end business processes, and from business intelligence to proactive systems. Most businesses do their business in memory and memory price has fallen faster than disk storage. The velocity of life has become event-driven - it happens on the fly."

Of course, at the time of the first dotcom wave in the late 1990s, Ranadivé was among the first to proclaim the importance of having all things becoming "event--driven" and happening "on the fly". Bill Gates wrote Business At The Speed Of Thought, Ranadivé wrote The Power of Now and everybody hymned the importance of real-time systems that would recognise changes and automate reactions based on business rules. A stock price trigger could create a buy in milliseconds with no manual intervention. Smart companies with very low latency would prosper while laggards would be left behind - electrons would -replace brain cells because the human brain could not process quickly enough.

Today, however, there would appear to be some reaction against some of these principles in favour of human experience, thinking things over and aversion to risk. That reaction has only been exacerbated by the shocking events of last year when, despite massive investments in business intelligence and risk management software, firms still failed to see the warning signs of impending disaster.

Ranadivé's reaction is characteristically blunt and technophile.

"They had antiquated systems," he says of companies caught up in the turmoil. "[They should have been] increasing the velocity not just at the trading desk but at the middle and the back office too. GRC [governance risk and compliance] was still operating in batch while something else was operating at the speed of light."

As a firm with deep links to financial services, you might expect Tibco to have been rocked by the crisis, but its fourth quarter was a record, with $185.5m in revenues and a highest ever $32.3m in profit, and Ranadivé also sees upside in the growth in popularity of service-oriented architecture, or SOA, as providing a boost to business.

"SOA is the best thing that happened to our industry," he says. "It's providing the on-ramps onto the highway for us to create business processes and apply rules-based systems. It's like when became defined and the database business took off."

Indeed, Ranadivé believes that SOA will in some ways become the new database, just more sophisticated and automated. "The database is a like a phone that doesn't ring and nobody knows what's happened. You have to query it to know," he says.

Ranadivé is less confident about getting a boost from another burgeoning sector, software as a service, suggesting that its effect might be limited to applications such as sales force automation and customer -relationship management.

"With SaaS, one size doesn't fit all," he says. "For core infrastructure, most companies would be unwilling to have that run outside their own boundaries."

Here to stay

Despite the solid financials, speculation on Tibco's future has popped up frequently in the last few years as middleware specialists like BEA, WebMethods and SeeBeyond Technology have been snapped up by enterprise giants.

Perhaps predictably, Ranadivé fends off criticism that the software giants now provide a one-stop-shop by defending the importance of best-of-breed players and the narrow focus of Tibco's research and development budget.

"In terms of our space, we're bigger than everyone else and we outspend them all on R&D," says Ranadivé. "We're the last neutral party."

For many organisations, that message will resonate. "I chose to work with Tibco because they had a great understanding of what we were doing," says Tim Mann, CIO of financial savings firm Skandia. "You get quick access to high-level people who are very familiar with your environment."

Mann adds that the joint setting up of a ‘Tibco Competence Centre' at Skandia was also one of the reasons for picking the company.

Ranadivé can also count on some support from an influential member of the analyst community.

"Vivek is just one of those dynamic people you meet and say ‘that was a great discussion'," says Ray Wang, vice president of Forrester Research and an expert on the enterprise software industry.

"From my friends at Tibco, he's seen as very passionate, he's learned to be more patient with age, and is seen as very smart and visionary. He does a good job hiring -really smart people, both street smarts and, of course, book smarts."

Comments