Prospectus Summary
This summary highlights the most important features of this offering and the information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, especially the risks of investing in our common stock discussed under the heading “Risk Factors” and our consolidated financial statements and related notes included in this prospectus.
QLIK TECHNOLOGIES INC.
Overview
We have pioneered a powerful, easy-to-use business intelligence solution that enables our customers to make better and faster business decisions. Our software platform, QlikView, combines enterprise-class analytics and search functionality with the simplicity and ease-of-use found in office productivity software tools for a broad set of business users. We have grown our customer base from over 1,500 customers in 2005 to over 13,000 in 2009 and increased our revenue at a 59% compound annual growth rate during the same period. Our solution addresses the needs of a diverse range of customers, from middle market customers to large enterprises such as BP, Campbell Soup Company, Colonial Life, The Dannon Company, Inc., Heidelberger Druckmaschinen AG, Kraft Foods, Lifetime Brands, National Health Service (NHS), Qualcomm, Symantec and Volvo Car UK Limited. We have customers in over 100 countries and approximately 77% of our revenue in 2009 was derived internationally.
According to a 2009 International Data Corporation (IDC) report, the business intelligence market is projected to grow to $8.6 billion in 2010. We believe QlikView addresses a broader market opportunity than solely traditional users of business intelligence tools. According to a 2009 Gartner, Inc. report, 28% of total potential users within organizations use business intelligence software. Small businesses and medium-sized enterprises have had limited adoption of traditional business intelligence solutions due to their high cost and complexity. QlikView addresses the needs of all business users in companies of all sizes.
QlikView empowers business users to navigate data in a manner consistent with the fluid, associative nature of human thought. QlikView is powered by our in-memory associative search technology which has utilized rapid advances in computing power to yield significant improvement in flexibility and performance at a lower cost than traditional business intelligence solutions. Our technology platform enables users to consolidate large, disparate data sets and discover relationships within data in real time when requested by the user. QlikView also visualizes this data in a simple, intuitive user interface that enables users to interactively explore and analyze information.
We have a differentiated business model designed to accelerate the adoption of our product by reducing the time and cost to purchase and implement our software. Our low risk approach to product sales provides a needed alternative to costly, all-or-nothing, traditional business intelligence sales models by offering free product downloads to individuals and a 30-day money back guarantee upon purchase. We initially focus on specific business users or departments within a prospective customer’s organization and seek to solve a targeted business need. After demonstrating QlikView’s benefits to initial adopters within an organization, we work to expand sales of our product to other business units, geographies and use cases with a long-term goal of broad organizational deployment. According to a 2009 IDC survey, 44% of our customers deploy QlikView in less than one month and 77% of our customers deploy QlikView in less than three months. In comparison, our customers have indicated to us that their prior implementations of traditional business intelligence tools often take up to 18 months. We have a diversified distribution model that consists of a direct sales force and a partner network that includes resellers, original equipment manufacturers (known as OEMs) and systems integrators. Additionally, our online user community, QlikCommunity, provides us with a loyal and growing network of users who promote our software, provide support for other users and contribute valuable insights and feedback for our product development efforts.
For the years ended December 31, 2009, 2008 and 2007, our revenue was $157.4 million, $118.3 million and $80.6 million, representing year-over-year growth of 33% in 2009 and 47% in 2008. For the three months ended December 31, 2009, our revenue was $61.7 million, representing 74% growth over the same period the prior year. In addition, we generated operating income of $13.2 million, $1.6 million and $0.1 million in 2009, 2008 and 2007. For the year ended December 31, 2009, software license and maintenance revenue comprised 90% and professional services and training comprised 10% of our total revenue.
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We believe that to succeed in today’s increasingly competitive markets, businesses must accelerate the rate at which they identify and respond to changing business conditions. An organization’s market agility and ultimate success are dependent upon its ability to harness the power of increasing volumes of information to make effective business decisions which can be achieved by business intelligence and data analytics software. The use and importance of this software within organizations of all sizes has significantly increased for several reasons, including:
Exponential Growth in Data Available for Analysis. Over the last two decades, organizations have made significant investments in software applications that produce substantial amounts of data that is often stored in different formats, making it challenging to efficiently analyze the data and gain insight from it without using powerful data analytics solutions.
Disparate Data Sources. In today’s highly competitive marketplace, companies are expanding operations through geographic diversification, acquisitions and partnerships, while more closely integrating their systems with those of their customers, partners and suppliers. As a result, organizations often deploy a number of tools, including data integration software, data warehouses and business intelligence tools, to gain insight from this disparate business data.
Decentralized Decision-Making. We believe that many organizations are shifting towards decentralized decision-making in order to more efficiently respond to changing industry trends and competitive threats. This shift has created the need for intuitive data analysis tools that support employees at all levels of the organization as they assume more responsibility for making critical business decisions.
Although these trends have led to increased adoption of business intelligence and data analytics tools, we believe that most traditional tools are inadequate to meet the needs of users and face the following limitations:
Analysis Tools Not Designed for Business Users. Most traditional business intelligence tools were developed specifically for data analysts and other quantitative professionals and require sophisticated programming in order to build pre-defined data sets and conduct analysis. A typical business user does not possess the skills or authority needed to modify the underlying data set and therefore receives static reports. As a result, these users lack access to critical data in a timely manner and may miss important insights needed to make business decisions.
Highly Inflexible Solutions are Difficult to Implement and Maintain. Traditional business intelligence solutions require the integration and summarization of large volumes of data stored across an organization, which can be a time-consuming process that requires significant professional services support. In addition, a substantial investment of time and money can be required to refresh the data summarization as the underlying data sources evolve and change.
Substantial Total-Cost-of-Ownership. Organizations incur significant hardware, software and professional services costs to deploy and maintain traditional business intelligence solutions. According to a 2009 report, Gartner estimates that the cost of development for business intelligence and data warehouse applications is about three to five times the cost of the software.
Spreadsheets Not Suited for Data Analysis and Lack Reliability. Spreadsheets have been widely adopted by business users for data analysis because they are readily available. However, spreadsheets are general purpose business productivity tools designed for data input and calculation that do not scale to support large data sets and lack auditing capabilities, sophisticated data security features and multi-user collaboration tools.
XBRL Pagebreak Begin End box 1 END PAGE WIDTH PAGEBREAK BEGIN PAGE WIDTH Begin box 1 XBRL Pagebreak EndOur Market Opportunity
QlikView addresses a broader market opportunity than just traditional users of business intelligence tools. According to a 2009 IDC report, the business intelligence market is projected to grow to $8.6 billion in 2010. We believe that published market size estimates exclude the vast majority of business users, as most of these individuals do not use traditional business intelligence solutions due to their cost and complexity.
The market for our software platform extends beyond large enterprises which have historically been the most frequent adopters of traditional business intelligence tools. The substantial cost and complexity of these traditional tools have limited adoption by small businesses and medium-sized enterprises. These potential users and customer segments represent a large, underpenetrated market opportunity that we believe will increasingly deploy powerful, enterprise-class software platforms if they are lower cost and easy to use. In addition to the business intelligence market, we also believe QlikView can be used to satisfy business users’ needs in adjacent markets, such as search and discovery software which according to a 2009 IDC report is projected to grow to $2.4 billion in 2010.
Our Solution
QlikView is an innovative business intelligence solution that combines enterprise-class analytics with the simplicity and ease-of-use found in office productivity software tools. We designed QlikView to enable business users in organizations of all sizes to make faster and better decisions. The key differentiators of our solution include:
Intuitive Experience Drives Broad Adoption. Unlike traditional business intelligence tools, QlikView empowers business users with sophisticated analytic capabilities delivered through an easy-to-use, intuitive user interface. QlikView extends the power of data analytics to the business users by allowing them to search associatively and define visual charts through simple point-and-click technology without the help of information technology (or IT) staff.
Faster Decision Cycles Increase Business Agility. QlikView can be installed and implemented throughout an organization in less than three months, compared to traditional business intelligence tools which we believe on average can take up to 18 months to implement. In addition, a customer’s analysis can be rapidly updated as underlying data evolves and analytic requirements change which enables business users to intuitively interrogate and analyze data in real time and reduce decision cycles.
Lower Total Cost-of-Ownership Yields Higher ROI. QlikView can be implemented in a self-service manner and requires less expenditures on hardware, software, services and ongoing IT support as compared to traditional business intelligence solutions.
Highly Scalable In-Memory Architecture Leverages Hardware Advances. QlikView benefits from two important computer hardware trends: 64-bit computing, which increases the amount of memory available on computers, and multi-core central processing units, or CPUs, which allow for parallel processing of complex calculations. The expected improvements in memory capacity and CPU performance will drive QlikView’s future performance with minimal incremental investment.
Open Platform Focus. QlikView is designed to be the easiest and fastest business intelligence platform on which business users can develop analytic applications. We license our platform to partners, such as independent software vendors and systems integrators, to create a wide variety of purpose-specific analytic applications.
Our Business Model
To complement QlikView, we have developed a differentiated business model that has the following attributes:
Broad User Focus. We seek to market and sell directly to the business user by providing an intuitive software platform that can be installed and used with minimal training. Unlike most existing business intelligence tools, QlikView is designed for business users and does not require substantial IT support to install, integrate and maintain.
Low Risk Rapid Product Adoption. To facilitate rapid adoption of our platform, we allow our customers to purchase licenses in the way that best meets their needs, including on an individual, workgroup, departmental or enterprise-wide basis. In addition, we offer free product downloads to individual users and a 30-day money back guarantee upon purchase.
XBRL Paragraph Pagebreak XBRL Pagebreak Begin End box 1 END PAGE WIDTH PAGEBREAK BEGIN PAGE WIDTH Begin box 1 XBRL Pagebreak End“Land and Expand” Customer Penetration. We seek to initially “land” within the organization of a new customer by solving a business need of specific business users or departments. We then work to “expand” the use of our solution across the organization by targeting other business units, geographies and use cases. Our customer penetration strategy is focused on creating a loyal user base that promotes adoption through tangible results and powerful, word-of-mouth marketing, which facilitate incremental sales.
Globally Diversified Distribution Model. We seek to maximize the reach of the QlikView platform by employing a multi-pronged sales approach that leverages a direct sales force and partner network which includes resellers, OEM relationships and systems integrators. We typically enter new markets through partnerships and reseller agreements to minimize cost and risk while assessing demand in the new market. We currently have distribution capabilities in over 100 countries and a network of over 1,100 channel partners worldwide to help generate demand for QlikView.
Community-Based Marketing and Support. We have established QlikCommunity, our user community, to augment our development, marketing and support efforts. This community of over 21,000 registered users as of December 31, 2009 promotes the use of our software within their organizations as well as to other organizations.
Our Growth Strategy
We intend to make QlikView the primary platform on which business users, in companies of all sizes, make critical business decisions. The key elements of our growth strategy include:
Increase Our Global Market Penetration. We intend to expand our presence in targeted geographies by growing our direct sales force and global partner network. We began our operations in Sweden, have established a substantial foothold in Western Europe and will continue to seek to expand globally, particularly in the United States, Japan, Australia, China, Russia and Brazil.
Further Penetrate Our Existing Customer Base. We intend to increase penetration of existing customers by capitalizing on current users’ satisfaction to promote QlikView to other users and departments within their organizations. Historically, we have effectively migrated new customers from single project and departmental deployments to multi-department deployments over time.
Extend Our Software Platform to Provide New Business Solutions. We plan to enhance our current platform by adding new functionality that extends our analytics, visualization and search capabilities to broader use cases. We believe that QlikView’s capabilities can be extended to adjacent areas where data-driven decisions are critical including website navigation, content search and information management, external data communication, product configuration and e-commerce applications.
Expand Our OEM Alliances and Strategic Relationships. We have an ongoing effort to increase our number of OEM alliances with other independent software vendors that license our technology to embed within and enhance their solutions. We believe we have a significant opportunity to expand the use of QlikView through our OEM relationships, which accounted for approximately 6% of our sales in 2009, as well as through other distribution relationships. In addition, we seek to expand our strategic reseller agreements and relationships with systems integrators and consultants and to use this channel to generate additional inbound customer prospects.
Enhance Adoption of QlikView by Offering a Robust Mobile Solution. We intend to offer a variety of delivery options that enable our customers to use our software from any location over any device. QlikView is available for many popular mobile platforms, including Apple iPhone, Android, BlackBerry and Symbian-based smart phones.
XBRL Pagebreak Begin End box 1 END PAGE WIDTH PAGEBREAK BEGIN PAGE WIDTH Begin box 1 XBRL Pagebreak EndRisks Associated with Our Business
Our business is subject to numerous risks described in the section entitled “Risk Factors” and elsewhere in this prospectus. You should carefully consider these risks before making an investment. Some of these risks include:
Our Corporate Information
We were founded in Sweden in 1993. From 1993 until 1999, our activities were focused on software research and development that resulted in QlikView’s core technology, and from 1999 until 2004 we focused on the commercialization of our technology primarily in the Nordic market and limited regions of Europe. In 2004, we reincorporated in Delaware and began to broaden our marketing and sales activities in the United States and continued our expansion globally. Our principal executive offices are located at 150 Radnor Chester Road, Suite E220, Radnor, Pennsylvania 19087 and our telephone number is (888) 828-9768. Our website address is www.qlikview.com. The information on, or that can be accessed through, our website is not part of this prospectus.
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