The tech bubble will never burst. Now for those of you who remember the dotcom boom, that may seem like an outlandish statement. But there were clear winners. Companies that survived the bust, only to become some of the world's most valuable companies. Mentioned in today's commentary includes: Facebook, Inc., The Walt Disney Company, Amazon.com, Inc., Uber Technologies, Inc., BlackBerry Limited.
That's not to say that the Googles and Facebooks of this world will maintain their astounding growth and near-monopoly on tech innovation. In fact, they are almost certainly going to experience serious competition in the near future. But, for savvy investors, tech is going to be the hottest sector of not just the next year, but the next decade.
Everything from transport to digital advertising and even space exploration is being transformed by up and coming tech disruptors. And it's all built on data. The life blood of the world's new digital reality.
In fact, in February this year, data overtook oil as the most valuable resource on earth.
And now a new breed of tech company is taking investors by storm. The tech bubble isn't bursting, it is simply being reshaped. And when the dust has settled, only truly adaptable businesses will be left.
#1 The King Of Big Data
Mark Zuckerberg's social-media giant Facebook Inc. suffered through a terrible 2018. Bad press, missteps by management, and a skeptical market saw Facebook plunge by a staggering (and record-breaking) $126 billion. But even with a shaky market, don't count Facebook out quite yet.
The company weathered its storm of bad press in 2018, and its fundamentals remain strong. In Q2 of 2019, for instance, Facebook recorded a YOY revenue increase of 28%.
Facebooks daily active users (DAUs) continue to grow, increasing 8% over the course of a year, to over 1.5 billion. The company continues to dominate the digital advertising landscape. Even with the body-blows of 2018, more than 20% of ALL HUMANS use Facebook on a daily basis. That's incredibly impressive.
The fact that it continues to increase revenue and grow its user base in the face of tougher privacy regulations and limits to data gathering. The news that CEO Mark Zuckerberg is dumping shares shouldn't frighten investors—Facebook, the social media pioneer, is still a strong player on the tech landscape.
#2 Up and Comers
Frankly Inc. is a tiny company with a big plan, and about it hopes to disrupt the multi-billion digital advertising market. Frankly is a new kind of data company. Not only does it have a plan to transform the world of digital media, it is providing publishers and broadcasters a much-needed alternative to advertising giants like Google and Facebook.
Frankly takes the three most lucrative sectors of digital media – engagement, monetization and data – and gives control back to publishers and broadcasters. It may be small— with a market cap of $30 million—but its user base of 100 million, if valued at $175 in terms of activated revenue per user (ARPU), constitutes an asset worth $20 billion. And as publishers grow increasingly weary of working with Big Tech, Frankly has the potential to disrupt the entire digital advertising market – a market that is expected to reach $665 billion by 2026.
See, Facebook and Google have become greedy. Together, they make up 60% of the market, and their billion-dollar revenue streams dwarf traditional media platforms—the New York Times, for instance, generates only $259 million. And publishers have had enough.
That's because both Google and Facebook refuse to share the most important data that they collect.
First party data, which includes everything from clicking habits to browsing patterns and personal information, is all collected and owned by these big tech giants. Publishers then have to pay out huge sums of money to get that data back. That's where Frankly comes in.
Frankly offers an alternative to Big Tech. It's already signed on with 1,200 outlets, including CNN and Vice Media. And Frankly's latest mammoth deal with Newsweek, adding 40 million users to its base, suggests the company's incredible growth is only just beginning.
It's also inked a deal to acquire Vemba, a leading video asset management, syndication, and monetization platform. This will give Frankly the ability to monetize Over-the-Top (OTT) video content, a market estimated to reach $332 billion by 2025, according to Allied Market Research.
Frankly is breaking into advertising in a way that takes advantage of Big Tech's weaknesses – positioning itself in line with the future of both broadcasting and digital advertising.
Frankly's platform has already scaled up to reach 75% of American households. Now its deal with Newsweek is set to add another 40 million users. That means that over 140 million people will be leaving a digital footprint within Frankly's network. And that's all data that can be used to help companies build better products, reach more interested users and create content more suited to their customer base.
With the monopoly of Big Tech cracking, this is a tech company for the future. And with 2020 elections looming, big data and advertising is only going to become more important.
#3 Media Dominance
It's not just the biggest media company in the world…Walt Disney Co. is now the biggest media company IN HISTORY. Just ten years ago, investors had counted Disney out—the once-powerful animation studio had a number of missteps and was losing the content popularity contest to companies like Pixar, Marvel and Lucasfilm.
Now, all three of those premier brands belong to the Mouse House—which topped off its decade-long spending spree by acquiring most of the brands owned by Twentieth-Century Fox, the biggest media deal in history, for a cool $71 billion. Disney has snapped up the best brands in the media landscape, and it's about to capitalize by taking on its remaining competition. This fall, Disney will launch Disney+, a streaming service designed to take out streaming juggernaut Netflix.
Disney is loading the platform with premier content—all the Marvel and Star Wars films, plus a raft of new properties, shows, and films designed to pull eyeballs away from Netflix. And the company's execs are feeling bullish—they predict they can pull 60 to 90 million subscribers by the end of 2024. And that's just the beginning: the new streaming platform could prove incredibly disruptive.
#4 The Retail Edge
The world's biggest online retailer has been a little stuck lately: Amazon. But that's about to change. The company is about to roll out its ambitious one-day delivery plan, promising the capacity to deliver goods to consumers across the United States in less than twenty-four hours.
This stock is incredibly expensive--shares trade for nearly $2000—but that's just a sign of its incredible value. The stock has grown 427% over the last five years—nothing to sneeze at. And despite the risks of regulatory pressures, there are few signs that Amazon will slow down any time soon. The plans to put in a massive new headquarters complex near Washington DC is moving forward, which should give the company considerably more clout in the Capitol.
Amazon has proven it's more than just a retail company—the firm's original tech division has chalked up some impressive wins, such as the Fire Stick and Alexa, the voice command household aide that has become ubiquitous across the U.S.
A good sign that Amazon is heading in the right direction? Increased investment from none other than Berkshire Hathaway, which increased its stake in Amazon to $937 million in mid-August.
#5 Innovation Leads The Way
The big story in tech had been the Uber IPO—the ride-sharing app joined the market with a tepid showing, and it hasn't done much business since. It's the cherry on top of a cake of trouble for the revolutionary tech company, which has suffered from a mountain of bad press.
It's controversial CEO Travis Kalanick was forced out over his behavior and the company's struggle to generate revenue, but the new management hasn't been able to do much better. Uber keeps burning through money: in Q2 of 2019 it posted a $5 billion operating loss, linked in part to the expensive IPO.Bears have been circling the wagons for a while, warning the Uber's ration is unsustainable. But bulls have been quick to point out how other revolutionary tech companies like Amazon and Facebook posted losses after their IPOs, before going on to become fabulously profitable.
Plus, Uber's losses are partly linked to its IPO and its rapid expansion rate: once the company solidifies its dominance of ride-sharing and makes inroads to self-driving cars, Uber's profits are likely to prove sturdy.
Moreover, while $5 billion sounds like a lot, it pales in comparison with what other big companies have suffered through--GM posted $48 billion loss in 2009 , and it's held on despite it.
#6 Branching Out
Blackberry Ltd the well-known cell-phone pioneer is engaged in the sale of smartphones and enterprise software and services. The Company's products and services include Enterprise Solutions and Services, Devices, BlackBerry Technology Solutions and Messaging.
Blackberry used to be a worldwide leader in phones, but Apple, Google and other Android manufacturers have rapidly acquired market share. Blackberry has since focused on software and is now developing systems for autonomous vehicles. Tech giants such as Apple and Google won't be able to repeat Blackberry's success in this sector that easily.
By. Amy Farrah
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Report finds that most large companies are not mature when it comes to business analytics; 62% still rely on spreadsheets.
More than two decades after the term "big data" was invented, a majority of companies still do not have initiatives in place to create an analytics-driven culture, according to a new Deloitte survey, "Analytics and AI-Driven Enterprises Thrive in the Age of With™: The Culture Catalyst." At the same time, the use of artificial intelligence (AI) and other advanced data-driven digital technologies are growing rapidly, as humans and machines collaborate (Loucks, Davenport and Schatsky, "State of AI in the Enterprise, 2nd Edition," Deloitte LLC, 2018).
The study, conducted in April 2019, examined 1,048 executives who work at large companies (501 and more employees) and interact with, create or use data. The goal was to see how many organizations fall within the top two — "Analytical Companies" and "Analytical Competitors" — of the five categories found in the Insight-Driven Organization (IDO) Maturity Scale. Finally, as we move into the "Age of With," a world where humans work side-by-side with machines and data coincides with actions, the survey also aimed to discover how organizations are currently using analytics and AI and what role culture and talent play in IDOs and data maturity.
"The results show there is a significant divide in how companies are approaching analytics. Many are finding that siloed initiatives, tools and specialized talent are not enough when applied independently," said Ben Stiller, principal and strategy and analytics practice lead for the retail and consumer products, Deloitte Consulting LLP. "To be successful in the 'Age of With,' companies must leap from being perpetual data 'dabblers' to becoming true analytics 'doers.' While the dabblers continue to execute informally disparate proofs of concept and pilots leading to minimum value delivery: The doers are systematically embracing data, adopting analytics, AI and automation; and changing the way work is done across the enterprise."
Today's business analytics landscape
Based on the IDO Maturity Scale, the survey found that fewer than four in 10 (37%) of executives believe that their companies are in the top two categories, and only 10% fall into the highest. While the remaining 63% are aware of analytics, they lack technology infrastructure, are still working in silos or are expanding ad hoc capabilities. In addition, 67% of executives surveyed are not comfortable accessing or using data from their existing tools and resources.
While 76% of survey respondents report that their analytical maturity has increased over the past year, most are still using traditional tools such as spreadsheets (62%) and business intelligence programs (58% combined). Sixty-four percent rely solely on structured data from internal systems or resources, eliminating insights from unstructured sources such as social media comments, product images and customer audio files. However, unstructured data can deliver a more comprehensive understanding of factors outside the organization that can impact business. In fact, the survey showed that executives who incorporate unstructured data into their approach are 24% more likely to have exceeded their business goals.
Culture is a catalyst (or culprit)
Of the 26% surveyed that use a single, common set of tools and methods across the enterprise for accessing and analyzing data, 80% exceeded their business goals last year. Adding to this, 37% of the companies with the highest level of analytical maturity on the IDO Maturity Scale, nearly half (48%) significantly exceeded business goals in the last 12 months.
This goes hand-in-hand with enlisting analytics champions: Executive sponsorship is vital to organizational change. According to the survey, the CEO is lead champion in 29% of organizations surveyed and those companies are 77% more likely to have exceeded their business goals significantly. They also are 59% more likely to derive actionable insights from the analytics they're tracking.
"It's clear from our research that organizations want to lead with advanced analytics, and the adoption of technology like machine learning only underscores their efforts," said Tim Smith, principal, Deloitte Consulting LLP and technology strategy and business transformation practice leader. "However, this willingness is not always matched with the ability to turn insights into action. Data science has to permeate company culture starting from the top to see true benefits."
Build an insights-driven organization
As companies continue to incorporate data in their operations, they must make business analytics a priority for all employees to exceed business goals. To create an IDO leaders should integrate culture, technology and talent to gain a competitive advantage:
All signs indicate that large organizations need to focus on business analytics to continue to grow and be positioned for success. However, most are hindered by their culture. Business leaders who deploy the responsibility of analytics more broadly and invest in an insight-driven culture will be poised to outperform their counterparts as well as be better prepared for the Age of With.
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500® and more than 5,000 private and middle market companies. Our people work across the industry sectors that drive and shape today's marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthy society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Our network of member firms in more than 150 countries and territories serves four out of five Fortune Global 500® companies.
Learn how Deloitte's approximately 286,000 people make an impact that matters at www.deloitte.com
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Investment led by Battery Ventures will fuel continued rapid expansion and new products in response to strong market demand.
Matillion, the leading provider of data transformation software for cloud data warehouses (CDWs), announced a $35 million round of funding.
The investment will allow Matillion to capitalize on its leading category position while continuing to deliver accelerated growth, and extend the capabilities of its flagship product line, Matillion ETL. Battery Ventures led the round, bringing Matillion's total funding to-date to $60 million. Existing investors, Sapphire Ventures and Scale Venture Partners also participated.
Continued strong demand for Matillion's data transformation software, purpose-built for the cloud, led the company to deliver triple-digit revenue growth in 2018 for the third consecutive year. The new investment, based on Matillion's sustained success, accelerates the company's expansion both within and well beyond its native-built solutions for CDWs.
"It's our view that every company in the world needs to compete using data," said Matthew Scullion, CEO at Matillion. "And most of the time they'll do this in the cloud. Only the cloud offers the speed, agility, power, and economics to cope with this demand for data insights, and to manage the exponentially growing data volumes and complexities that we work with today. As the leader in purpose-built data transformation software for cloud data warehouses, Matillion is perfectly positioned to help our customers compete and win using data. That's why we're so excited to raise this round, partner with the great team at Battery Ventures, and to once again accelerate our business and the development of our current and future products."
"Matillion has built an innovative, cloud-native, data-middleware product from the ground up, and the company partners with some of the fastest-growing cloud-data warehousing platforms that enterprises are deploying today," said Dharmesh Thakker, general partner at Battery Ventures. "Battery is focused on such cloud-first businesses worldwide - including in Europe - as enterprise IT shifts to the cloud, and the ability to analyze data underpins the digital-transformation process at all companies. We're excited to partner with Matthew and the Matillion team to help drive the next phase of the company's global growth."
"Matillion has established itself as an essential component to the modern enterprise's data analytics tech stack," said Denise Persson, CMO at Snowflake. "Our shared focus on innovation has made us great partners, and this latest investment reinforces Matillion's leadership in cloud-native solutions for data transformation. We're excited to see them continue their growth trajectory as they advance their industry-leading technology to serve our joint customers."
Matillion's software empowers customers to extract data from a wide number of sources, load it into their chosen cloud data warehouse, and transform that data from its siloed source state, into useful, joined together, analytics-ready data - ready to be consumed in analytics, machine learning and artificial intelligence use cases. Purpose-built for the cloud, Matillion does this at scale, delivering fast time to value, high performance with pay-as-you-drink economics - simplicity, speed, scale, and savings.
Matillion's software is used by more than 550 customers across 40 countries, including global companies like Bose, GE, Siemens, Fox and Accenture, as well as high growth, data-centric companies like Vistaprint, Splunk, and Zapier.
Matillion is data transformation for cloud data warehouses. Only Matillion is purpose-built for Amazon Redshift, Snowflake, and Google BigQuery enabling businesses to achieve new levels of simplicity, speed, scale, and savings. Trusted by companies of all sizes to meet their data integration and transformation needs, Matillion products are highly rated across the AWS, GCP and Azure Marketplaces. Dual-headquartered in Manchester, UK and Denver, Colorado, Matillion also has offices in New York City and Seattle. Learn more about how you can unlock the potential of your data with Matillion's cloud-based approach to data transformation. Visit us at www.matillion.com
About Battery Ventures
Battery strives to invest in cutting-edge, category-defining businesses in markets including software and services, Web infrastructure, consumer Internet, mobile and industrial technologies. Founded in 1983, the firm backs companies at stages ranging from seed to private equity and invests globally from offices in Boston, the San Francisco Bay Area, London, Israel and New York.
Visit our website at www.battery.com
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Industrial age business models are failing us by regarding data as a cost that needs to be constrained.
Bestselling author and leading futurist Tom Koulopoulos has teamed up with Wasabi hot cloud storage CEO and serial entrepreneur David Friend to provide business leaders with a clear and straightforward understanding of the incredible power of the cloud and data abundance.
The Bottomless Cloud: How AI, the Next Generation of the Cloud, and Abundance Thinking Will Radically Transform the Way You Do Business (Hybrid Global Publishing; Paperback; January 15, 2019) takes a hard look at how industrial age business models are failing us by regarding data as a cost that needs to be constrained, rather than an near infinite resource that can be mined to build entirely new sources of value and insight.
According to Koulopoulos, "An abundance of data, like the abundance of electricity that powered the industrial revolution 100 years ago, is driving the world's economy.
The data abundance mindset is being driven by the ever-decreasing cost of storing data. Businesses that fail to make the transition to a data abundance mindset will be left behind by competitors who transform their industries by using vast amounts of data to fuel AI and Machine Learning."
The sudden emergence of new data-rich transformative businesses like online shopping, navigation, logistics, medical care, and online financial services is no accident. The cost of storing all the data that makes these businesses possible simply dropped to the point where such things became profitable. Cloud 2.0 technology, with far cheaper and faster cloud storage, will continue to drive innovation and the complete rethinking of traditional businesses.
According to Friend, "You have to throw away the old idea of thinking of data storage as a cost to be minimized and instead focus on building complete and unique data sets that give you the ability to do things you just couldn't do before. Companies, such as Uber, Nike, and Netflix, have adopted this mindset to build and grow entirely new businesses." "The other point," adds Friend, "is that, as the cost of data drops, you reach a tipping point where the value of data far exceeds its cost; that's when your business model has to flip to an abundance mindset."
The Bottomless Cloud is defining the tenets of success in the 21st Century by changing the way we view data, from being a by-product of business to a foundational driver of radically new business models.
Tom Koulopoulos is the Chairman and co-founder of Boston-based Delphi Group, a 30 year-old global futures think tank that focuses on the impact of digital technologies. Delphi Group was named one of the 500 fastest growing private companies in the US by Inc magazine. He is the author of 11 books, the past executive director of the Babson Center for Business Innovation, an adjunct professor at Boston University, and a frequent keynote speaker on the future. Tom is also a contributing editor for INC.com.
David Friend is the co-founder and CEO of Wasabi, a revolutionary cloud storage company. Wasabi provides bottomless storage that's 80% cheaper, up to 6x faster and even more reliable than the competition. David's first company, ARP Instruments developed synthesizers used by Stevie Wonder, David Bowie, Led Zeppelin and even helped Steven Spielberg communicate with aliens providing that legendary five-note communication in Close Encounters of the Third Kind. Friend founded or co-founded five other companies: Computer Pictures Corporation – an early player in computer graphics, Pilot Software - a company that pioneered multidimensional databases for crunching large amounts of customer data, Faxnet - which became the world's largest provider of fax-to-email services, Sonexis - a VoIP conferencing company, and immediately prior to Wasabi, what is now one of the world's leading cloud backup companies, Carbonite. In addition, David is a respected philanthropist and supporter of the arts in Boston. He is on the board of Berklee College of Music, where there is a concert hall named in his honor, serves as president of the board of Boston Baroque, an orchestra and chorus that has received 7 Grammy nominations. An avid mineral and gem collector he donated Friend Gem and Mineral Hall at the Yale Peabody Museum of Natural History.
David graduated from Yale and attended the Princeton University Graduate School of Engineering where he was a David Sarnoff Fellow.