Qualtrics CEO Ryan Smith is buying majority stake in the Utah Jazz for $1.6B

The Utah Jazz, an NBA basketball team based in Salt Lake City, announced today that Qualitrics CEO and co-founder Ryan Smith was buying a majority stake in the team along other properties. ESPN is reporting the deal is worth $1.6 billion.

Smith can afford it. He sold Qualtrics, which is based in Provo, Utah, in 2018 to SAP for $8 billion just before the startup was about to go public. Earlier this year, SAP announced plans to spin out Qualtrics as public company.

In addition to The Jazz, he’s also getting Vivint Arena, the National Basketball Association (NBA) G League team Salt Lake City Stars and management of the Triple-A baseball affiliate Salt Lake Bees. Smith is buying the properties from the Miller family, who have run them for over three decades.

Smith was over the moon about being able to buy into a franchise he has supported over the years. “My wife and I are absolutely humbled and excited about the opportunity to take the team forward far into the future – especially with the greatest fans in the NBA. The Utah Jazz, the state of Utah, and its capital city are the beneficiaries of the Millers’ tremendous love, generosity and investment. We look forward to building upon their lifelong work,” he said in a statement.

The deal is pending approval of the NBA Board Governors, but once that happens, Smith will have full decision making authority over the franchise. He is not the first tech billionaire to buy a basketball team.

Qualtrics, which makes customer survey tools, was founded in 2002 and raised over $400 million from firms like Accel, Insight Partners and Sequoia before selling the company two years ago to SAP.

Smith is not the first tech billionaire to buy a basketball team. He joins Mark Cuban, who bought the Dallas Mavericks in 1999 after selling Broadcast.com to Yahoo for $5.7 billion that same year. Former Microsoft CEO Steve Ballmer bought the Los Angeles Clippers in 2014 for $2 billion.

#cloud, #enterprise, #ma, #mergers-and-acquisitions, #nba, #qualtrics, #ryan-smith, #sap, #tc

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SAP shares fall sharply after COVID-19 cuts revenue, profit forecast at software giant

SAP announced its Q3 earnings yesterday, with its aggregate results down across the board. And after missing earnings expectations, the company also revised its 2021 outlook down. The combined bad news spooked investors, crashing its shares by over 20% in pre-market trading and the stock wasn’t showing any signs of improving in early trading.

The German software giant has lost tens of billions of dollars in market cap as a result.

The overall report was gloomy, with total revenues falling 4% to €6.54 billion, cloud and software revenue down 2%, and operating profit down 12%. The only bright spot was its pure-cloud category, which grew 11% to €1.98 billion.

SAP’s revenue result was around €310 million under expectations, though its per-share profit beat both adjusted, and non-adjusted expectations.

While SAP’s big revenue miss might have been enough to send investors racing for the exits, its revised forecast doubled concerns. Even though the company said that its customers are accelerating their move to the cloud during the pandemic — something that TechCrunch has been tracking for some time now — SAP also said that the pandemic is slowing sales, and large projects.

Constellation Research anayst Holger Mueller says this is resulting in an unexpected revenue slow-down.

“What has happened at SAP is a cloud revenue delay as customers know that SAP is only investing into cloud products, and they have to migrate to those in the future. The news is that SAP customers are not migrating to the cloud during a pandemic,” Mueller told TechCrunch.

In a sign of the times, SAP spent a portion of its earnings results talking about 2025 results, a maneuver that failed to allay investor concerns that the pandemic was dramatically impacting SAP’s business today and in the coming year.

For 2020, SAP made the following cuts to its forecasts:

  • €8.0 – 8.2 billion non-IFRS cloud revenue at constant currencies (previously €8.3 – 8.7 billion
  • €23.1 – 23.6 billion non-IFRS cloud and software revenue at constant currencies (previously €23.4 – 24.0 billion)
  • €27.2 – 27.8 billion non-IFRS total revenue at constant currencies (previously €27.8 – 28.5 billion)
  • €8.1 – 8.5 billion non-IFRS operating profit at constant currencies (previously €8.1 – 8.7 billion)

So, €300 million to €500 million in cloud revenue is now gone, along with €300 million to €400 million in cloud and software revenue, and €600 to €700 million in total revenue. That cut profit expectations by up to €200 million.

The company, however, is trying to put a happy face on the future projections, believing that as the impact of COVID begins to diminish, existing customers will eventually shift to the cloud and that will drive significant new revenues over the longer term. The trade-off is short-term pain for the next year or two.

“Over the next two years, we expect to see muted growth of revenue accompanied by a flat to slightly lower operating profit. After 2022 momentum will pick up considerably though. Initial headwinds of the accelerated cloud transition will start to turn into tailwinds for revenue and profit. […] That translates to accelerated revenue growth and double digit operating profit growth from 2023 onwards,” SAP CFO Luka Mucic said in a call with analysts this morning.

The question now becomes can they meet these projections, and if the longer-term approach during a pandemic will placate investors. As of this morning, they weren’t looking happy about it.

#cloud, #crm, #customer-experience, #earnings, #enterprise, #enterprise-software, #erp, #sap

0

Robin.io launches a free version of its cloud-native Kubernetes storage solution

Robin.io, a cloud-native application and data management solution with enterprise customers like USAA, Sabre, SAP, Palo Alto Networks and Rakuten Mobile, today announced the launch of its new free(-mium) version of its service, in addition to a major update to the core of its tool.

Robin .io promises that it brings cloud-native data management capabilities to containerized applications with support for standard operations like backup and recovery, snapshots, rollbacks and more. It does all of that while offering bare-metal performance and support for all major clouds. The service is essentially agnostic to the actual database being used and offers support for the likes of PostgreSQL, MySQL, MongoDB, Redis, MariaDB, Cassandra, Elasticsearch and others.

Image Credits: Robin.io

“Robin Cloud Native Storage works with any workload on any Kubernetes-based platform and on any cloud,” said Robin founder and CEO Partha Seetala. “With capabilities for storing, taking snapshots, backing up, cloning, migrating and securing data — all with the simplest of commands — Robin Cloud Native Storage offers developers and DevOps teams a super simple yet highly performant tool for quickly deploying and managing their enterprise workloads on Kubernetes.”

The new free version lets teams manage up to 5 nodes and 5TB of storage. The promise here is that this a free-for-life offering and the company obviously expects that it allows enterprises to get a feel for the service and then upgrade to its paid enterprise plans over time.

Talking about those enterprise plans, the company also today announced that it is moving to a consumption-based pricing plan, starting at $0.42 per node-hour (though it also offers annual subscriptions). The enterprise plan includes 24×7 support and doesn’t limit the number of nodes or storage capacity.

Among the new features to Robin’s core storage service are data management support for Helm Charts (where Helm is the Kubernetes package manager), the ability to specify where exactly the data should reside (which is mostly meant to keep it close to the compute resources) and affinity policies that ensure availability for stateful applications that rely on distributed databases and data platforms.

#ceo, #cloning, #cloud, #cloud-computing, #cloud-infrastructure, #cloud-native-computing-foundation, #elasticsearch, #kubernetes, #mirantis, #mongodb, #mysql, #palo-alto-networks, #rakuten-mobile, #robin, #sabre, #sap, #usaa

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#DealMonitor – #EXKLUSIV Picus investiert in Avi Medical – Atlantic setzt auf Audry – Benner Holding investiert in Gindumac


Im aktuellen #DealMonitor für den 5. Oktober werfen wir wieder einen Blick auf die wichtigsten, spannendsten und interessantesten Investments und Exits des Tages. Alle Deals der Vortage gibt es im großen und übersichtlichen #DealMonitor-Archiv.

INVESTMENTS

Avi Medical
+++ Picus Capital und die UiPath-Gründer investieren in Avi Medical. Hinter dem jungen Startup stecken Vlad Lata (Mitgründer von Konux), Christoph Baumeister. (Mitgründer von nello) und Julian Kley, zuletzt BCG. “We are on a mission to elevate the patient experience and provide the best possible primary care by combining technology with a human touch”, heißt es auf der Website. Konkret möchte die Jungfirma “die ambulante Patientenbetreuung in das 21. Jahrhundert zu bringen”. Dazu entwickelt das Unternehmen  “nutzerorientierte, digitale Anwendungen, die den Austausch zwischen Patienten und Praxen erleichtern, transparenter machen und administrative Arbeiten automatisieren”. Zudem gründet Avi Medical ” allgemeinärztliche Praxen um eine ganzheitliche Betreuung abzubilden”. Hintergründe gibt es nur im ds-Insider-Podcast. #EXKLUSIV

Audry

  • Atlantic Labs investiert in Audry. Das Berliner Startup, das von Niklas Hildebrand und Eugenio Warglien geführt wird, möchte Podcastern zu mehr Reichweite verhelfen. Hinzu kommt eine AdTech-Komponente: “At Audry we enable brands to scale podcast advertising through programmatic buying”. Das Audry-Team baute vorher Boutiq, einen Influencer-Dienst auf. Hintergründe gibt es nur im ds-Insider-Podcast. #EXKLUSIV

Gindumac

  • Die Schuhe24-Macher, also die Benner Holding, investiert in Gindumac. Der Marktplatz rund mm Gebrauchtmaschinen der Metallbearbeitung und Kunststoffverarbeitung ging 2016 an den Start. Zuletzt investierte der Münchner Anlagenhersteller Krauss Maffei in das Unternehmen aus Kaiserslautern. Die Benner Holding betreibt neben Schuhe24 auch Outfits24 und WeWantShoes. Hintergründe gibt es nur im ds-Insider-Podcast. #EXKLUSIV

heartbeat medical
+++ btov Partners, Holtzbrinck Ventures und der High-Tech Gründerfonds (HTGF) investieren 5 Millionen Euro in heartbeat medical. Das E-Health-Startup, das eine Software anbietet, mit der der Erfolg medizinischer Behandlungen vor, während und nach der Behandlung gemessen werden kann, wurde 2014 von Yannik Schreckenberger, Sebastian Tilch, Marc Tiedemann und Yunus Uyargil gegründet. Holtzbrinck Ventures investierte 2017 bereits 3 Millionen Euro in das Startup.

trackle 
Die SchneiderGolling & Cie. Beteiligungsgesellschaft und die Pro Invest TechTalys Beteiligungsgesellschaft sowie die Altinvestoren investieren einen hohen sechsstelligen Betrag in trackle. Das junge Unternehmen entwickelt und vertreibt ein Wearable Device, das Frauen im Zyklustracking unterstützt. Mehrere Investoren und die NRW.BANK investieren bereits einen sechsstelligen Betrag in das Bonner Startup.

Pydro
+++ gigahertz.ventures investiert gemeinsam mit den Altinvestoren Genius Venture Capital und Thomas Clemens eine siebenstellige Summe in Pydro. Das Startup aus Hamburg, das 2016 gegründet wurde, hilft Wasserversorgern, ihre Wasserverluste zu minimieren. “Das Ziel der Finanzierung ist die Weiterentwicklung des energieautarken und smarten Sensors für Wasserrohrleitungen hin zur Serienreife”, teilt das Unternehmen mit.

EXITS

Emarsys
+++ Der Walldorfer Software-Konzern SAP übernimmt den österreichischen Marketing-Technlogie-Anbieter Emarsys. Das 2000 gegründete österreichische Unternehmen, das keine Umsatz- oder Gewinnzahlen veröffentlicht, beschäftigte zuletzt 800 Mitarbeiter an 13 Standorten. Zu den Kunden des Unternehmen zählen Firmen wie Puma, Sky und Bugatti. Die Private-Equity-Gesellschaft Vector Capital investierte vor fünf Jahren 33 Millionen US-Dollar in Emarsys.

Bergfex
+++ Russmedia Equity Partners übernimmt 60 % der Anteile an Bergfex, einer Tourismusplattform im Alpenraum. Die drei Gründer Markus Kümmel, Oliver Jusinger und Andreas Koßmeier bleiben auch nach der Übernahme operativ und als Gesellschafter im Unternehmen tätig. Bergfex mit Sitz in Graz gong bereits 1999 an den Start. Zu Russmedia Equity Partners gehören Investments wie erento, PaulCamper und eversports.

Achtung! Wir freuen uns über Tipps, Infos und Hinweise, was wir in unserem #DealMonitor alles so aufgreifen sollten. Schreibt uns eure Vorschläge entweder ganz klassisch per E-Mail oder nutzt unsere “Stille Post“, unseren Briefkasten für Insider-Infos.

Startup-Jobs: Auf der Suche nach einer neuen Herausforderung? In der unserer Jobbörse findet Ihr Stellenanzeigen von Startups und Unternehmen.

Foto (oben): Shutterstock

#aktuell, #atlantic-labs, #audry, #avi-medical, #benner-holding, #bergfex, #bonn, #e-health, #emarsys, #femtech, #gindumac, #heartbeat-medical, #picus-capital, #pydro, #russmedia-equity-partners, #sap, #telemedizin, #trackle

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SAP continues to build out customer experience business with Emarsys acquisition

SAP seemed to be all in on customer experience when it acquired Qualtrics for $8 billion in 2018. It continued on that journey today when it announced it was acquiring Austrian cloud marketing company Emarsys for an undisclosed amount of money.

Emarsys, which raised over $55 million, according to PitchBook data, gives SAP customer personalization technology. If you talk to any marketing automation vendor over the last several years, the focus has been on using a variety of data and touch points to understand the customer better, and deliver more meaningful online experiences.

With the pandemic closing or limiting access to brick and mortar stores, personalization has taken a new urgency as customers are increasingly shopping online and companies need to meet them where they are.

With Emarsys, the company is getting an omnichannel marketing solution that they say is designed to deliver messages to customers wherever they are including e-mail, mobile, social, SMS, and the web, and deliver that at scale.

When SAP announced it was spinning out Qualtrics a couple of months ago, just 20 months after buying, it left some question about whether SAP was fully committed to customer experience business.

Brent Leary, founder and principal analyst at CRM Essentials says that the acquisition shows that SAP is still very much in the game. “This illustrates that SAP is serious about CX and competing in a highly competitive space. Emarsys adds industry-specific customer engagement capabilities that should help SAP CX customers accelerate their efforts to provide their customers with the experiences they expect as their needs change over time,” Leary told TechCrunch.

As an ERP company at its core, SAP has traditionally focused on back office kind of operations, but Bob Stutz, president, SAP Customer Experience sees this acquisition as a way to continue bringing back office and front office operations together.

“With Emarsys technology, SAP Customer Experience solutions can link commerce signals with the back office and activate the preferred channel of the customer with a relevant and consistently personalized message, allowing customers the freedom to choose their own engagement,” Stutz said in a statement.

The company, which is based in Austria, was founded back in 2000 when marketing was a very different world. It has built a customer base of 1500 companies with 800 employees in 13 offices across the globe. All of this will become part of SAP, of course and come under Stutz’s purview.

As with all transactions of this type it will be subject to regulatory approval, but the deal is expected to close this quarter.

#cloud, #customer-experience, #enterprise, #exit, #fundings-exits, #ma, #marketing, #mergers-and-acquisitions, #sap, #startups, #tc

0

ServiceNow updates its workflow automation platform

ServiceNow today announced the latest release of its workflow automation platform. With this, the company is emphasizing a number of new solutions for specific verticals, including for telcos and financial services organizations. This focus on verticals extends the company’s previous efforts to branch out beyond the core IT management capabilities that defined its business during its early years. The company is also adding new features for making companies more resilient in the face of crises, as well as new machine learning-based tools.

Dubbed the ‘Paris’ release, this update also marks one of the first major releases for the company since former SAP CEO Bill McDermott became its president and CEO last November.

“We are in the business of operating on purpose,” McDermott said “And that purpose is to make the world of work work better for people. And frankly, it’s all about people. That’s all CEOs talk about all around the world. This COVID environment has put the focus on people. In today’s world, how do you get people to achieve missions across the enterprise? […] Businesses are changing how they run to drive customer loyalty and employee engagement.”

He argues that at this point, “technology is no longer supporting the business, technology is the business,” but at the same time, the majority of companies aren’t prepared to meet whatever digital disruption comes their way. ServiceNow, of course, wants to position itself as the platform that can help these businesses.

“We are very fortunate at ServiceNow,” CJ Desai, ServiceNow’s Chief Product Officer, said. “We are the critical platform for digital transformation, as our customers are thinking about transforming their companies.”

As far as the actual product updates, ServiceNow is launching a total of six new products. These include new business continuity management features with automated business impact analysis and tools for continuity plan development, as well as new hardware asset management for IT teams and legal service delivery for legal operations teams.

Image Credits: ServiceNow

With specialized solutions for financial services and telco users, the company is also now bringing together some of its existing solutions with more specialized services for these customers. As ServiceNow’s Dave Wright noted, this goes well beyond just putting together existing blocks.

“The first element is actually getting familiar with the business,” he explained. “So the technology, actually building the product, isn’t that hard. That’s relatively quick. But the uniqueness when you look at all of these workflows, it’s the connection of the operations to the customer service side. Telco is a great example. You’ve got the telco network operations side, making sure that all the operational equipment is active. And then you’ve got the business service side with customer service management, looking at how the customers are getting service. Now, the interesting thing is, because we’ve got both things sitting on one platform, we can link those together really easily.”

Image Credits: ServiceNow

On the machine learning side, ServiceNow made six acquisitions in the area in the last four years, Wright noted — and that is now starting to pay off. Specifically, the company is launching its new predictive intelligence workbench with this release. This new service makes it easier for process owners to detect issues, while also suggesting relevant tasks and content to agents, for example, and prioritizing incoming requests automatically. Using unsupervised learning, the system can also identify other kinds of patterns and with a number of pre-built templates, users can build their own solutions, too.

“The ServiceNow advantage has always been one architecture, one data model and one born-in-the-cloud platform that delivers workflows companies need and great experiences employees and customers expect,” said Desai. “The Now Platform Paris release provides smart experiences powered by AI, resilient operations, and the ability to optimize spend. Together, they will provide businesses with the agility they need to help them thrive in the COVID economy.”

#articles, #artificial-intelligence, #bill-mcdermott, #business, #ceo, #enterprise, #machine-learning, #paris, #sap, #servicenow, #tc, #workflow

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SAP decision to spin out Qualtrics 20 months after spending $8B surprises industry watchers

When SAP announced it was spinning out Qualtrics on Sunday, a company it bought less than two years ago for an eye-popping $8 billion, it was enough to make your head spin. At the time, then CEO Bill McDermott saw it as a way to bridge the company’s core operational with customer data, while acquiring a cloud company that could help generate recurring revenue for the ERP giant, and maybe give it a dose of innovation along the way.

But Sunday night the company announced it was spinning out the acquisition, giving its $8 billion baby independence, and essentially handing the company back to founder Ryan Smith, who will become the largest individual shareholder when this all over.

It’s not every day you see founders pull in a windfall like $8 billion, get sucked into the belly of the large corporate beast and come out the other side just 20 months later with the cash, independence and CEO as the largest individual stockholder.

While SAP will own a majority of the stock, much like Dell owns a majority of VMware, the company will operate independently and have its own board. It can acquire other firms and make decisions separately from SAP.

We spoke to a few industry analysts to find out what they think about all this, and while the reasoning behind the move involves a lot of complex pieces, it could be as simple as the deal was done under the previous CEO, and the new one was ready to move on from it.

Bold step

It’s certainly unusual for a company like SAP to spend this kind of money, and then turn around so quickly and spin it off. In fact, Brent Leary, principal analyst at CRM Essentials, says that this was a move he didn’t see coming, and it could be related to that fat purchase price. “To me it could mean that SAP didn’t see the synergies of the acquisition panning out as they had envisioned and are looking to recoup some of their investment,” Leary told TechCrunch.

Holger Mueller, an analyst with Constellation Research agreed with Leary’s assessment, but doesn’t think that means the deal failed. “SAP doesn’t lose anything in regards to their […] data and experience vision, as they still retain [controlling interest in Qualtrics] . It also opens the opportunity for Qualtrics to partner with other ERP vendors [and broaden its overall market],” he said.

Jeanne Bliss, founder and president at CustomerBLISS, a company that helps clients deliver better customer experiences sees this as a positive step forward for Qualtrics. “This spin off enables Qualtrics to focus on its core business and prove its ability to provide essential technology executives are searching for to enable speed of decision making, innovation and customization,” she said.

Show me the money

Patrick Moorhead, founder and principal analyst at Moor Insight & Strategy sees the two companies moving towards a VMware/Dell model where SAP removes the direct link between them, which could then make them more attractive to a broader range of customers than perhaps they would have been as part of the SAP family. “The big play here is all financial. With tech stocks up so high, SAP isn’t seeing the value in its stock. I am expecting a VMware kind of alignment with a strategic collaboration agreement,” he said.

Ultimately though, he says the the move reflects a cultural failure on the part of SAP. It simply couldn’t find a way to co-exist with a younger, more nimble company like Qualtrics. “I believe SAP spinning out Qualtrics is a sign that its close connection to create symbiotic value has failed. The original charter was to bring it in to modernize SAP but apparently the “not invented here” attitudes kicked in and doomed integration,” Moorhead said.

That symbiotic connection would have involved McDermott’s vision of combining operational and customer data, but Leary also suggested that since the deal happened under previous the CEO, that perhaps new CEO Christian Klein wants to start with a clean slate and this simply wasn’t his deal.

Qualtrics for the win

In the end, Qualtrics got all that money, gets to IPO after all, and returns to being an independent company selling to a larger potential customer base. All of the analysts we spoke to agreed the news is a win for Qualtrics itself.

Leary says the motivation for the original deal was to give SAP a company that could sell beyond its existing customer base. “It seems like that was the impetus for the acquisition, and the fact that SAP is spinning it off as an IPO 20 months after acquiring Qualtrics gives me the impression that things didn’t come together as expected,” he said.

Mueller also sees nothing but postivies Qualtrics. “It’s a win […] for Qualtrics, which can now deliver what they wanted [from the start], and it’s a win for customers as Qualtrics can run as fast as they want,” he said.

Regardless, the company moves on, and the Qualtrics IPO moves forward, and it’s almost as though Qualtrics gets a do-over with $8 billion in its pocket for its trouble.

#bill-mcdermott, #christian-klein, #cloud, #customer-experience, #drama, #enterprise, #erp, #fundings-exits, #ma, #mergers-and-acquisitions, #qualtrics, #ryan-smith, #sap, #tc

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Why is SAP spinning Qualtrics out via an IPO?

Over the weekend, software giant SAP announced that it will take Qualtrics public, with the German software company retaining a majority stake in the Utah-based “experience management” firm after its forthcoming debut.

SAP paid $8 billion in cash for Qualtrics back in 2018, right before the smaller firm was set to go public. Chatting with the CEOs of both companies around the time of the deal, they were pretty pumped about the combination. Since then, SAP has swapped CEOs.


The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


At the time, the deal not only made waves within the business realm, it also helped put Utah’s startup scene on the map. (An $8 billion deal makes an impact.)

Current commentary on the spin-out idea seems to rotate on the idea of unlocking value, that if SAP can float a good chunk of Qualtrics’ shares, the market may give that equity a good price. And, then, the value of Qualtrics that SAP will retain will gain implicit value, perhaps boosting the value of its own shares. Making the point, CNBC quoted analysts from Bernstein Research, which said it believes “many SAP investors do not fully understand Qualtrics,” and that the spin-out might “help at least as it relates to better understanding its value.”

What is Qualtrics worth? If we can understand that, we’ll know if the current commentary regarding the spin-out makes sense. So this morning, let’s remind ourselves how big Qualtrics was heading into its IPO, what it might have been worth, how much it has have grown since and what that might be worth at today’s super-high software valuations.

Did SAP overpay? Did it get a deal? Let’s find out what Qualtrics might look like in 2020.

2018

Before SAP stole it from the public markets, Qualtrics was looking for $18 to $21 per share on the public markets, valuing the company at around $3.9 billion to $4.5 billion. SAP had to pay up for Qualtrics stock, obviously, to get the deal done given how hot the Utah-based firm was at the time.

Qualtrics had growth and profits, two things that combine to create lots and lots of market value. Here are some key Qualtrics numbers from the time:

#christian-klein, #cloud, #cloud-applications, #extra-crunch, #ma, #market-analysis, #market-research, #qualtrics, #saas, #sap, #software, #startups, #tc, #the-exchange

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Equity Monday: SAP, Qualtrics, and oh boy are we excited

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest big news, chats about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here, and myself here, and don’t forget to check out last Friday’s episode.

Here’s what we talked about today:

  • Headlines: SAP is spinning out part of Qualtrics, Dave leaked customer data, Asian markets were mixed while US shared opened green. Cryptos and gold are up at the same time, marking the moment as a melt-up.
  • The Qualtrics news was the loudest note from the weekend’s jam, coming a few years after SAP bought the Utah-based tech giant. SAP will retain a majority stake even after the debut, but the plan should give Qualtrics more freedom, and SAP a better valuation for the piece of the smaller company that it retains. That’s if the spin-out goes well, of course.
  • Dave’s leak looks bad, and will test what happens to more nascent fintech properties when they endure this sort of breach.
  • Looking ahead, this is a huge earnings week. We’ll see results from Amazon, Apple, Alphabet, Facebook, and others.
  • And, finally, rounds from StashAway, cargo.one, and Blueheart.

Closing, we’re in exciting territory on the public markets given that high share prices are giving big companies more ammunition than ever. Let’s see what they can get done with it before the window closes.

Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

#equity-monday, #equity-podcast, #fundings-exits, #qualtrics, #sap, #startups, #tc

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SAP will spin out its $8B spin-in Qualtrics acquisition

Well, this isn’t a story you see every day.

Less than two years after German software giant SAP snatched experience management platform Qualtrics for $8 billion days before the startup’s IPO debut, it has now decided to spin out the company in a brand new IPO.

https://techcrunch.com/2018/11/11/sap-agrees-to-buy-qualtrics-for-8b-in-cash-just-before-the-survey-software-companys-ipo/

In a press statement released Sunday, SAP said that Qualtrics had seen cloud growth “in excess of 40 percent” in a quote attributed to SAP CEO Christian Klein. The company will continue to be run by founder and former CEO Ryan Smith, who joined SAP with Qualtrics and led the organization within the German conglomerate.

SAP will retain majority ownership of the new spin out. Interestingly, the statement noted that “Ryan Smith intends to be Qualtrics’ largest individual shareholder.”

SAP’s press statement is vague, but the implication is that the move will offer Qualtrics more flexibility to engage with customers and partners outside of its parent company’s dominion.

I am sure my Equity colleague Alex Wilhelm will have much more to analyze tomorrow with his The Exchange column, but SAP’s rapid about-face on the acquisition is a major surprise. While private equity firms will take a company private and sometimes quickly turn it around in an IPO, it is rare to see a large company like SAP make such a dramatic last minute bid for a company only to reverse that decision just months later.

Given the heated market for SaaS markets these days though, the path seems clear for Qualtrics’ return to the public markets, particularly if the soon-to-be independent company’s metrics have held up since we last saw its financials. As Wilhelm and his Crunchbase news team wrote back during its S-1 filing:

Qualtrics, unlike most companies going public this year, isn’t a trash fire of losses incurred under the name of growth. It shows that you can grow, and not lose every one of the dollars you have at the same time.

“Isn’t a trash fire” was a high bar back then, but Qualtrics was indeed an outperformer of its peer group. Assuming those fundamentals haven’t changed, it looks like a real win for Qualtrics and Smith, and a save by SAP from whatever strategic plan they decided to change midstream.

#enterprise, #qualtrics, #ryan-smith, #sap

0

Typewise taps $1M to build an offline next word prediction engine

Swiss keyboard startup Typewise has bagged a $1 million seed round to build out a typo-busting, ‘privacy-safe’ next word prediction engine designed to run entirely offline. No cloud connectivity, no data mining risk is the basic idea.

They also intend the tech to work on text inputs made on any device, be it a smartphone or desktop, a wearable, VR — or something weirder that Elon Musk might want to plug into your brain in future.

For now they’ve got a smartphone keyboard app that’s had around 250,000 downloads — with some 65,000 active users at this point.

The seed funding breaks down into $700K from more than a dozen local business angels; and $340K via the Swiss government through a mechanism (called “Innosuisse projects“), akin to a research grant, which is paying for the startup to employ machine learning experts at Zurich’s ETH research university to build out the core AI.

The team soft launched a smartphone keyboard app late last year, which includes some additional tweaks (such as an optional honeycomb layout they tout as more efficient; and the ability to edit next word predictions so the keyboard quickly groks your slang) to get users to start feeding in data to build out their AI.

Their main focus is on developing an offline next word prediction engine which could be licensed for use anywhere users are texting, not just on a mobile device.

“The goal is to develop a world-leading text prediction engine that runs completely on-device,” says co-founder David Eberle. “The smartphone keyboard really is a first use case. It’s great to test and develop our algorithms in a real-life setting with tens of thousands of users. The larger play is to bring word/sentence completion to any application that involves text entry, on mobiles or desktop (or in future also wearables/VR/Brain-Computer Interfaces).

“Currently it’s pretty much only Google working on this (see Gmail’s auto completion feature). Applications such as Microsoft Teams, Slack, Telegram, or even SAP, Oracle, Salesforce would want such productivity increase – and at that level privacy/data security matters a lot. Ultimately we envision that every “human-machine interface” is, at least on the text-input level, powered by Typewise.”

You’d be forgiven for thinking all this sounds a bit retro, given the earlier boom in smartphone AI keyboards — such as SwiftKey (now owned by Microsoft).

The founders have also pushed specific elements of their current keyboard app — such as the distinctive honeycomb layout — before, going down a crowdfunding route back in 2015, when they were calling the concept Wrio. But they reckon it’s now time to go all in — hence relaunching the business as Typewise and shooting to build a licensing business for offline next word prediction.

“We’ll use the funds to develop advanced text predictions… first launching it in the keyboard app and then bringing it to the desktop to start building partnerships with relevant software vendors,” says Eberle, noting they’re working on various enhancements to the keyboard app and also plan to spend on marketing to try to hit 1M active users next year.

“We have more ‘innovative stuff’ [incoming] on the UX side as well, e.g. interacting with auto correction (so the user can easily intervene when it does something wrong — in many countries users just turn it off on all keyboards because it gets annoying), gamifying the general typing experience (big opportunity for kids/teenagers, also making them more aware of what and how they type), etc.”

The competitive landscape around smartphone keyboard tech, largely dominated by tech giants, has left room for indie plays, is the thinking. Nor is Typewise the only startup thinking that way (Fleksy has similar ambitions, for one). However gaining traction vs such giants — and over long established typing methods — is the tricky bit.

Android maker Google has ploughed resource into its Gboard AI keyboard — larding it with features. While, on iOS, Apple’s interface for switching to a third party keyboard is infamously frustrating and finicky; the opposite of a seamless experience. Plus the native keyboard offers next word prediction baked in — and Apple has plenty of privacy credit. So why would a user bother switching is the problem there.

Competing for smartphone users’ fingers as an indie certainly isn’t easy. Alternative keyboard layouts and input mechanism are always a very tough sell as they disrupt people’s muscle memory and hit mobile users hard in their comfort and productivity zone. Unless the user is patient and/or stubborn enough to stick with a frustratingly different experience they’ll soon ditch for the keyboard devil they know.  (‘Qwerty’ is an ancient typewriter layout turned typing habit we English speakers just can’t kick.)

Given all that, Typewise’s retooled focus on offline next word prediction to do white label b2b licensing makes more sense — assuming they can pull off the core tech.

And, again, they’re competing at a data disadvantage on that front vs more established tech giant keyboard players, even as they argue that’s also a market opportunity.

“Google and Microsoft (thanks to the acquisition of SwiftKey) have a solid technology in place and have started to offer text predictions outside of the keyboard; many of their competitors, however, will want to embed a proprietary (difficult to build) or independent technology, especially if their value proposition is focused on privacy/confidentiality,” Eberle argues.

“Would Telegram want to use Google’s text predictions? Would SAP want that their clients’ data goes through Microsoft’s prediction algorithms? That’s where we see our right to win: world-class text predictions that run on-device (privacy) and are made in Switzerland (independent environment, no security back doors, etc).”

Early impressions of Typewise’s next word prediction smarts (gleaned by via checking out its iOS app) are pretty low key (ha!). But it’s v1 of the AI — and Eberle talks bullishly of having “world class” developers working on it.

“The collaboration with ETH just started a few weeks ago and thus there are no significant improvements yet visible in the live app,” he tells TechCrunch. “As the collaboration runs until the end of 2021 (with the opportunity of extension) the vast majority of innovation is still to come.”

He also tells us Typewise is working with ETH’s Prof. Thomas Hofmann (chair of the Data Analytic Lab, formerly at Google), as well as having has two PhDs in NLP/ML and one MSc in ML contributing to the effort.

“We get exclusive rights to the [ETH] technology; they don’t hold equity but they get paid by the Swiss government on our behalf,” Eberle also notes. 

Typewise says its smartphone app supports more than 35 languages. But its next word prediction AI can only handle English, German, French, Italian and Spanish at this point. The startup says more are being added.

#android, #apple, #apps, #artificial-intelligence, #data-mining, #elon-musk, #eth, #europe, #fundings-exits, #gmail, #google, #machine-learning, #microsoft, #ml, #mobile, #mobile-app, #mobile-device, #operating-systems, #oracle, #privacy, #salesforce, #sap, #smartphones, #swiftkey, #switzerland, #typewise, #zurich

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Google Coronavirus Apps Give it Way to Access Location Data

Some government agencies that use the software said they were surprised that Google may pick up the locations of certain app users. Others said they had unsuccessfully pushed Google to make a change.

#android-operating-system, #apple-inc, #bluetooth-wireless-technology, #computer-security, #coronavirus-2019-ncov, #coronavirus-risks-and-safety-concerns, #denmark, #general-data-protection-regulation-gdpr, #germany, #global-positioning-system, #google-inc, #gps, #ios-operating-system, #latvia, #merkel-angela, #mobile-applications, #princeton-university, #privacy, #sap, #surveillance-of-citizens-by-government, #switzerland, #wurtzburg

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Sinch acquires SAP’s Digital Interconnect messaging business for $250M

M&A activity has generally slowed down in the weeks since the novel coronavirus took a grip on the world, but there have been some pockets of activity in the tech industry when the price is right or when the divestment/acquisition just makes sense.

The world of messaging brings us the latest development in that theme: SAP, the CRM and enterprise software giant, is selling its Digital Interconnect messaging business to Sinch, a Swedish cloud voice, video and messaging company that originally spun out from low-cost IP calling company Rebtel and is now public.

Sinch is paying €225 million (around $250 million) on a cash and debt-free basis for the business, which has 1,500 enterprise customers that use it for various messaging services, such as “omnichannel” conversations with customers over SMS, push, email, WhatsApp, WeChat and Viber; and messaging technology for carriers.

The deal will give Sinch, based in Sweden, a foothold in the US market — the Digital Interconnect business is headquartered in Silicon Valley — and access to a trove of customers using the kind of messaging technology that Sinch develops and sells.

Messaging continues to be a very high-volume, low-margin (or even no-margin in some cases) business, and so a bigger strategy for more economy of scale that will continue to play out. As a case in point: Sinch has been on an acquisition spree in the last month. Other deals have included Latin American messaging provider Wavy ($119 million, announced March 26), and ChatLayer ($6 million, announced April 20).

“With SAP Digital Interconnect now becoming a part of Sinch, we build on our scale, focus and capabilities to truly redefine how businesses engage with their customers, throughout the world,” comments Oscar Werner, Sinch CEO, in a statement. “The transaction strengthens our direct connectivity globally. Plus, it enables us to expand and accelerate a range of business-critical services to mobile operators, including products for person-to-person messaging, reporting and analytics.”

The news caps off nearly a month of speculation that SAP was gearing up for a sale of the legacy unit as part of a bigger strategy to focus more squarely on its CRM and newer enterprise IT services — SAP acquired Qualtrics in November 2018 for $8 billion, spearheading a stronger move into employee and customer experience, surveys and research — in a particularly challenging economic environment.

And between then and now SAP has seen a very notable personnel change: its co-CEO Jennifer Morgan stepped away from the company by mutual agreement with the board, leaving Christian Klein as sole CEO (the two had been in the co-CEO roles for only six months). At the time, the company said that the abrupt change — a mere 10 days between announcement and departure — was in response to “the current environment [which] requires companies to take swift, determined action which is best supported by a very clear leadership structure.”

It would appear that this sale is an example of the kind of swift and determined action that the board was hoping to see.

SAP’s messaging unit has been around in one form or another for years. It became a part of SAP in 2010 as part of its acquisition of Sybase, but even before that Sybase acquired Mobile 365, which had developed the messaging technology, back in 2006.

At the time, the messaging business was the primary part of Mobile 365, and Sybase paid $417 million for the company. In that regard, it might look like SAP is selling it for a loss, although you could also argue that 15+ year-old technology in the fast-moving world of messaging would have depreciated at this point.

The business itself is very typical of messaging: huge volumes but not huge revenues.

In 2019, SAP said that the enterprise messaging business processed 18 billion messages, while its carrier services processed 292 billion carrier messages. The Bloomberg report that broke the news about the intent to sell the division said that it made $50 million in EBITDA and $250 million in revenue last year, but actually this is small relatively speaking: SAP altogether had revenues of nearly $30 billion in the same period. In other words, it’s an okay business but not really core to SAP and where it’s going. 

On the other hand, it’s a better fit for Sinch, which is a much smaller company — market cap of about $3.1 billion (30.82 billion Swedish krona), versus SAP’s market cap of $139 billion — but is squarely focused on messaging services similar to those that the former SAP division offers.

“SAP Digital Interconnect is a leader in its area showing profitable growth and reaching 99 percent of the world’s mobile subscribers. Looking at Sinch’s innovation and investment strategy in the area of cloud communication platforms, we welcome them as the new owner of SDI. Sinch is perfectly positioned to unleash further growth potential we see in SDI,” said Thomas Saueressig, member of the Executive Board of SAP SE, responsible for SAP Product Engineering, in a statement.

M&A continues on in the wider European region even while so much else has slowed down or stopped in the current market. This deal follows on the heels of Intel acquiring Israel’s Moovit for $900 million, and Avira in Germany getting acquired by Investcorp at a $180 million valuation.

#enterprise, #europe, #exit, #ma, #messaging, #sap, #sinch, #startups, #tc, #tcuk

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Cloud Foundry renews its focus on developer experience as it looks beyond the enterprise

The Cloud Foundry Foundation (CFF) just went through a major leadership change, with executive director Abby Kearns stepping down after five years (and becoming a CTO at Puppet) and the CFF’s CTO Chip Childers stepping into the top leadership role in the organization. For the most part, though, these changes are only accelerating some of the strategic moves the organization already made in the last few years.

If you’re unfamiliar with the open-source Cloud Foundry project, it’s a Platform-as-a-Service that’s in use by the majority of Fortune 500 enterprises. After a lot of technical changes, which essentially involved building out support for containers and adding Kubernetes as an option for container orchestration next to the container tools Cloud Foundry built long before the rise of Google’s open-source tool, the technical underpinnings of the project are now stable. And as Childers has noted before, that now allows the project to refocus its efforts on developer experience.

That, after all, was always the selling point of Cloud Foundry. Developers stick to a few rules and, in return, they can easily push their apps to Cloud Foundry with a single command (“cf push”) and know that it will run, while the enterprises that employ them get the benefits of faster development cycles.

On the flip side, though, actually managing that Cloud Foundry install was never easy, and required either a heavy lift from internal infrastructure teams or the help of outside firms like Pivotal, IBM, SAP, Suse and others to run and manage the platform. That pretty much excluded smaller companies, and especially startups, from using the platform. As Childers noted, some still did use it, but that was never the project’s focus.

Now, with the Kubernetes underpinnings in place, he believes that it will become easier for non-enterprise users to also get started with the platform. And projects like KubeCF and CF for K8s now offers a full Cloud Foundry distribution for Kubernetes, which makes it relatively easy to use the platform on top of modern infrastructure.

To highlight some of these changes, the CFF today unveiled its new tutorial hub that will not just explain what Cloud Foundry is, but also feature tutorials to get started. Some of these will be hosted and written by the Foundation itself, while community members will contribute others.

“Our community has created a learning hub, curated by the Cloud Foundry Foundation, of open-source tutorials for folks to learn Cloud Foundry and related cloud native technologies,” said Childers. “The hub includes an interactive hands-on lab for first-time Cloud Foundry users to experience how easy the platform makes deploying applications to Kubernetes, and is open for the community to contribute.”

#abby-kearns, #chip-childers, #cloud, #cloud-computing, #cloud-foundry, #cloud-foundry-foundation, #cloud-infrastructure, #computing, #developer, #google, #ibm, #kubernetes, #sap, #suse, #tc, #web-hosting, #web-services

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And then there was one: Co-CEO Jennifer Morgan to depart SAP

In a surprising move, SAP ended its co-CEO experiment yesterday when the company announced Jennifer Morgan will be exiting stage left on April 30th, leaving Christian Klein as the lone CEO.

The pair took over at the end of last year when Bill McDermott left the company to become CEO at ServiceNow, and it looked like SAP was following Oracle’s model of co-CEOs, which had Safra Catz and Mark Hurd sharing the job for several years before Hurd passed away last year.

SAP indicated that Morgan and the board came to a mutual decision, and that it felt that it would be better moving forward with a single person at the helm. The company made it sound like going with a single CEO was always in the plans, and they were just speeding up the time table, but it feels like it might have been a bit more of a board decision and a bit less Morgan, as these things tend to go.

“More than ever, the current environment requires companies to take swift, determined action which is best supported by a very clear leadership structure. Therefore, the decision to transfer from Co-CEO to sole CEO model was taken earlier than planned to ensure strong, unambiguous steering in times of an unprecedented crisis,” the company wrote in a statement announcing the change.

The move also means that the company is moving away from having a woman at the helm, something that’s unfortunately still rare in tech. Why the company decided to move on from the shared role isn’t clear, beyond using the current economic situation as cover. Neither is it clear why they chose to go with Klein over Morgan, but it seems awfully soon to be making a move like this when the two took over so recently.

#christian-klein, #co-ceos, #drama, #enterprise, #jennifer-morgan, #personnel, #sap, #tc

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ServiceNow pledges no layoffs in 2020

You don’t need your PhD in economics to know the economy is in rough shape right now due to the impact of COVID-19, but ServiceNow today pledged that it would not lay off a single employee in 2020 — and in fact, it’s hiring.

While Salesforce’s Marc Benioff pledged no significant layoffs for 90 days last month, and asked other company leaders to do the same, ServiceNow did them one better by promising to keep every employee for at least the rest of the year.

Bill McDermott, who came on as CEO at the end of last year after nine years as CEO at SAP, said that he wanted to keep his employees concentrating on the job at hand without being concerned about a potential layoff should things get a little tighter for the company.

“We want our employees focused on supporting our customers, not worried about their own jobs,” he said in a statement.

In addition, the company plans to fill 1,000 jobs worldwide, as well as hire 360 college students as interns this summer, as they continue to expand their workforce, when many industries and fellow tech companies are laying off or furloughing employees.

The company also announced that it is taking part in a program called People+Work Connect, with Accenture, Lincoln Financial Group and Verizon (the owner of this publication). This program acts as an online employer to employer clearing house for these companies to hire employees laid off or furloughed by other companies. The company plans to post 800 jobs through this channel.

#bill-mcdermott, #cloud, #coronavirus, #covid-19, #enterprise, #hiring, #sap, #servicenow, #tc

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