The sharing economy, fueled by the internet’s capacity to match small buyers and sellers, looks like a revolutionary business model. But for this model to be sustained, there must be a reliable source of long-term profits. Ride-hailing is perhaps the application of the sharing economy that is currently most developed, so its success or failure will teach us a great deal about the model’s viability in the global business landscape.
At some point, you have to make a profit.
It also ads a cynical angle to “disruption” that’s often omitted: you have to burn a lot of money, maybe even 5 or 10 year’s worth. Older companies often can’t do this without a huge financial and share-holder toll.
Source: Why Uber’s Business Model May Not Be Viable
Financial goop on Cloudera and HortonWorks merging:
The deal for the merger of the two companies is surprisingly simple. Shareholders in Hortonworks will get 1.305 shares in Cloudera and Cloudera will be the remaining company in fact, if not necessarily in name. This means that Cloudera shareholders will own 60 percent of the combined company and Hortonworks shareholders will own the remaining 40 percent. The combined companies had a fully diluted equity value of $5.2 billion before the merger was announced. At the time the deal was announced, the combined firms had more than $500 million in cash, no debt, and 2,500 customers who largely do not overlap. There are more than 120 customers who spend $1 million a year and another 800 customers who spend more than $100,000 a year for subscriptions and such.
Original source: Hadoop Needs To Be A Business, Not Just A Platform
“Amazon.com Inc. is famous for its losses over the years. But even in the heyday of the dot-com bubble, the e-commerce giant never came close. Amazon’s biggest loss was in 2000—a $1.4 billion embarrassment, or about $2 billion adjusted for inflation. Most years, Amazon turns a profit, albeit a small one. What Uber backers can point to, though, is a nearly unmatched pace of sales growth. Even as Uber’s revenue reached $2.3 billion in the fourth quarter of 2017, its annual growth rate remained strong, at about 90 percent compared with 2016. That’s faster than most tech companies with a similar valuation. Only one U.S. tech company of Uber’s size, Micron, grew at anything close to that last year.”
Original source: Uber Spent $10.7 Billion in Nine Years. Does It Have Enough to Show for It?
“Founded in 2007, Dropbox epitomizes the freemium go-to-market. Dropbox has grown from 0 to 500 million users over that time period. 2% of those users convert to paid and pay an average of $9.33 per month. 90% of revenue originates through self serve channels – an astounding figure for company that generated more than $1B in revenue last year.”
Original source: Dropbox S-1 Analysis – The King of Freemium
“strong results such as these show how the company can succeed by continuing to migrate its business users to cloud services. It remains deeply embedded in business computing”
Original source: Strong financial results from Microsoft as it aims for breadth of services
2% profit margin is much better than no- or negative-percent.
“In 2017, we will exit our Annualized Recurring Revenue (ARR) between $24.5 — $25.5M, a growth of 52%, up from 46% growth the previous year. Our gross margin for the recurring business is 88%, and will increase in coming years. In 2017, we will turn our first profit with $603K EBITDA and generate $2.7M cash from operations.”
Original source: WSO2: Our 2017 Results and 2018 Plan
The San Francisco-headquartered business revealed it pulled in $187.7m last year, up 170 per cent from its $110.3m in revenue in 2015. Gross profits were just over $138m from $78m, and net losses decreased to a piddling $49.6m, down from $65.4m the year before.
Another take from Barb Darrow, inc.:
Mulesoft has raised $1.5 billion in venture funding from such backers as Lightspeed Venture Partners, Hummer Winblad, and New Enterprise Associates.
Man, that’s a lot of money poured into it since 2006 – “G round.”
Once again, the key metric of new software license sales was off—falling 19% to $1.35 billion compared to last year, and missing analysts’ expectations of $1.44 billion.
On the other hand:
“Our cloud revenue will be larger than our new software license revenue next fiscal year, when the transition will be largely complete.”
“Our cloud applications goal is to be the world largest and most profitable SaaS company. We are growing our cloud business much faster than Salesforce.com, and we can beat them to the $10 billion mark, but it’s going to be close,” Ellison told analysts on the call.
Database-as-a-service, which basically runs a company’s database on a third party’s cloud, is a fast-growing category for Oracle, according to the company. In fact, Oracle co-CEO Mark Hurd said that business was up 700% year over year, hitting $100 million in quarterly revenue.
Source: Oracle’s Cloud Business Has Yet to Surpass Its Falling License Sales