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Topsy Turvy Times for Opsware

Software specialist Opsware Inc., which is trying to make its presence felt in the emerging data center automation market, beat revenue expectations with its second-quarter results. But with Opsware a year away from breakeven, the company's shares dropped 48 cents (10.32 percent) to $4.17 today (see Opsware Surpasses Guidance).

Opsware, which is only in its third year of selling software, posted revenues of $14.1 million, up 60 percent from the same period last year. This beat analysts estimates of $13.88 million.

On a GAAP basis, however, the company posted a net loss of $3.9 million, or 4 cents a share, although this included charges related to its acquisitions of Tangram Enterprise Solutions and Rendition Networks (see Opsware Acquires Tangram and Opsware Opens Its Wallet). These figures were worse than the same period last year, when Opsware reported a net loss of $800,000, or 1 cent per share, and were also below analysts’ estimates of 2 cents (see Opsware Reports Q2).

Overall, this represents another topsy-turvy financial quarter for Opsware, which is regarded as something of a trailblazer in the server automation space. However, the performance of Opsware’s stock has not always matched its technology story (see Topsy-Turvy Q1 For Opsware).

With businesses increasingly deploying complex Web-based applications, IT managers often need to tweak their data center kit to provide additional capacity. Reconfiguring each server individually is costly and time-consuming, hence the move towards software that can make these changes automatically.

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