Long before he bought the Kings, Vivek Ranadive was quietly touching the lives of practically everyone in Sacramento. And all over the world.
If you’ve ever flown on a plane, gambled at a casino, driven on a California highway, shipped a package or shopped at a major department store, chances are you have come into contact with Ranadive’s company, Tibco Software Inc., without even knowing it.
The $1 billion-a-year company provides the unseen nervous system that helps 4,000 corporations and government agencies stay afloat. It specializes in “big data,” the art of storing and massaging billions of bits of electronic information. Delta Air Lines uses Tibco’s products to manage the flow of passengers, flight crews, baggage and meals. Tibco enables FedEx customers to track their shipments online. Union Pacific Railroad uses Tibco to make its trains run on time.
“It’s really the backbone for moving information for much of the world,” said Ranadive, the company’s founder, chairman and chief executive, in a recent interview at Tibco’s Palo Alto headquarters.
Tibco’s prowess is starting to rub off on the Kings. To a degree rarely seen among sports owners, Ranadive’s day job is more than just the wealth generator that enabled him to lead a group that bought the team. It’s also a source of technological innovation for the Kings organization. An early example is the team’s new smartphone app, built with Tibco technology. It relies heavily on big data to market everything from tickets to team jerseys, and it attempts to take fan interaction to a new level.
The system will “give us the ability to understand who our fans are, and treat them in a way that they deserve to be treated,” Ranadive said.
In that sense, the Kings are merely the latest organization swept up in Tibco’s world, joining a roster that includes Procter & Gamble, Royal Caribbean, Smart & Final and JPMorgan Chase. Ranadive said Tibco has become practically indispensable in industries like banking and transportation and that Black Friday would fall flat without his company. The Department of Homeland Security is a customer, and Ranadive insists that Tibco could have prevented the website snafus that have plagued the rollout of the Affordable Care Act, “for just a few million dollars.”
That may seem like bragging, but software like Tibco’s is “absolutely vital” to the legions of companies that rely on the smooth flow of data, said Michael Franklin, a UC Berkeley computer-science professor who specializes in this field. “Companies are completely dependent on this type of technology,” he said.
Certainly there are other, more famous companies in the data business. Oracle Corp. is nearly four times as big. But Tibco is at the forefront of a major technological force called “real-time analytics,” in which software sifts through data to instantly spot trends, anticipate customer needs and detect potential problems.
“It’s kind of the big thing right now,” said Rob Enderle, of the Enderle Group tech-consulting firm in San Jose. “If you’re driving, it doesn’t do a lot of good for the navigation system to tell you to make a turn two days later. Real-time analytics is kind of like the navigation system that tells you to turn right now.”
Reliance Communications, a phone company in Ranadive’s native India, is an example of how Tibco’s software anticipates change. Reliance was losing 3 million customers a month because of service problems. Tibco’s software figured out that customers were likely to leave if they experienced six dropped calls a day. Now, after the fifth drop, customers are instantly offered free messaging to stay with Reliance. Customer retention has improved.
“As long as I’m moving all that information, why not start looking at it?” said Ranadive, who has written three books on the use of data. “You sift through that data and you make sense of that data and you find patterns.”
A casino chain – Tibco officials say they can’t reveal the name – uses the software to keep discouraged gamblers from leaving.
Based on loyalty-card data, the casino knows that a certain customer will leave when his losses total, say, $500. Just before he hits his limit, the software kicks in and alerts the casino’s staff. An employee taps the customer on the shoulder and offers him a table at his favorite restaurant and tickets to a show, no charge. The goal: Make him feel better so he’ll resume gambling later.
“We now make you happy before you even know you’re unhappy,” Ranadive said.
The basic foundation of Tibco’s products is comparable to the computer bus, the hardware that enables components to work together. The “Tib” in Tibco stands for “the information bus” – the software that serves as a common platform through which different systems communicate with one another.
Caltrans, for instance, uses Tibco’s products to help run its Advanced Transportation Management System, a set of programs that operate the agency’s remote cameras, on-ramp meters, Amber Alerts and more.
“It’s kind of like the glue of our ATMS system,” said Stan Slavin, a transportation systems engineer at Caltrans. “It’s like a communications traffic director.”
The same principle applies at Homeland Security’s Citizenship and Immigration Service, which has to sort through information supplied by multiple agencies when a foreigner seeks to enter the country or apply for a visa or green card.
“In real time, we can, with your fingerprints and all the rest, check through the millions and trillions and zillions of data that they have,” said Raj Verma, Tibco’s senior vice president for North American infrastructure sales. “All of the processing of that and the background checks gets done on our software.”
‘A social network’
Tibco has been on a roll; revenue grew 58 percent between 2008 and 2012. Ranadive’s stock in the company, which trades on the Nasdaq market, is worth around $330 million.
True, profits have fallen this year, and industry analyst Mike Gualtieri said Tibco faces an increasingly crowded field. Nonetheless, Tibco is “an extremely well-respected company,” said Gualtieri, of Forrester Research in Cambridge, Mass.
The Kings seem like an extension of the firm. Visitors to the lobby of Tibco’s headquarters are greeted by a video of Ranadive being interviewed on CNBC – followed by a clip of his speech to Kings fans at a rally last spring in downtown Sacramento. When Ranadive was a part owner of the Golden State Warriors, he brought Tibco’s know-how to the team’s marketing operations, and he’s intent on implementing his high-tech vision in Sacramento as well.
Exhibit A is the smartphone app. Designed by Ranadive’s son, Andre, who works for Tibco, the app has whimsical features like a virtual cowbell. It’s also a serious marketing tool. While the product is still evolving, the goal is to connect to fans individually through their phones, offering personal greetings when they enter Sleep Train Arena, merchandise offers when they’re near a team store, and so on.
“I don’t look at it as a basketball team, I look at it as a social network,” said the elder Ranadive, who often speaks of heightening basketball’s popularity in India. “It’s not just the 18,000 people in the arena, it’s a half million people outside the arena and it’s the millions of people beyond Sacramento.”
To avoid conflicts of interest, Ranadive said Tibco’s board of directors has to sign off on business dealings between the company and the Kings. “It has to make business sense for Tibco,” he said.
Already, he said Tibco is benefiting from its relationship with the Kings. Sports teams are examining the features Tibco built into the new app.
“I can have the Kings be a showcase for (the technology),” he said. “This is something that everybody is interested in. We will sell this to other sports teams.”
TIBCO SOFTWARE INC. AT A GLANCE
Headquarters: Palo Alto
2012 results: $122.1 million profit on $1.02 billion revenue
Stock: Closed at $24.47 Friday on Nasdaq
Source: Tibco filings with Securities and Exchange Commission, Nasdaq
WHAT TIBCO DOES FOR...
Delta Air Lines: Manages flow of flight arrivals, passenger check-ins, etc. Delivers instant alerts to customers about delays.
FedEx: Allows customers to track progress of shipments, saving the company on phone-support costs.
Macy’s: Enables clerks to offer shoppers on-the-spot deals based on their preferences.
Department of Homeland Security: Collects and analyzes data on applicants for green cards and visas, looking for potential irregularities.
Source: Tibco.com and The Bee research