Dell: Now Private, What Next?

According to the latest worldwide PC shipment report, during the past quarter, PC shipments continued to decline. Globally PC shipment fell 8.6% to 80.28 million units. Lenovo remained the market leader with a 17.6% market share, and Dell came in a distant third with a 11.6% market share. Dell’s quarterly shipment of 9.31 million PCs was 1% higher than previous year’s shipment of 9.22 million. Dell’s market share has also improved from 10.5% a year ago to 11.6% during the recently ended quarter. Within the U.S. Dell maintained its position as the second largest PC vendor, with shipment of 3.34 million PCs growing 3.3% over the year to account for 21% of the U.S. market.

>>>

Benefitfocus – A Successful SaaS IPO

An IBISWorld report published for the previous year estimates the human resources benefits administration market in the U.S. to be worth more than $59 billion last year. Researcher Gartner estimates that last year, the U.S. insurance industry spent more than $55 billion on software and related services. Recently listed Benefitfocus is a provider of cloud-based benefits software solutions.

>>>

Shutterfly’s Growth Strategy

Recent market reports suggest that consumers are shifting from printing photos to sharing them electronically. According to market reports, more than 22 billion photos will be shared through electronic media by 2015. The trend now is to create personalized products like mugs and totes instead of ordinary photo prints.

>>>

Jive Trading Near 52-Week Lows

An IDC report published earlier this year projects the worldwide enterprise social software market to grow from $1 billion in 2012 to $2.7 billion by the year 2017, translating to an annualized growth rate of 22%. Last year, IBM remained the leader with a 14% market share. Jive Software (Nasdaq:JIVE) came in second with a 10% market share.

>>>

IBM Continues to Push Growth Through Acquisitions

According to IDC’s United States Black Book 4Q12 report, total enterprise spending on hardware, software, and IT services is projected to grow 6% this year to $474 billion. The researcher believes that growth is impacted by continuing economic concerns across the globe. Analysts believe that most IT budgets will be focused on big data and analytics, cloud computing, and mobility.

>>>

Cloud Vendor Covisint Rings in Its IPO

A Gartner report published earlier this year estimated the worldwide public cloud services market to grow 18.5% in 2013 to $131 billion. Most growth in the market is driven by infrastructure as a service (IaaS), including cloud computing, storage, and print services. This sub-sector is projected to grow 47.3% this year to $9 billion. Gartner also estimates cloud services market to grow to $677 billion by 2016. The market is dominated by North America, which accounts for 59% of worldwide spending.

>>>

Veeva’s Solid IPO

According to IDC research, the $1.6 trillion life sciences industry spent more than $44 billion in technology investments in 2012. Of this figure, $28 billion was spent on software and services, and $16 billion was spent on infrastructure. As in other industries, cloud computing is also seeing strong adoption within the life sciences industry.

>>>

How Can Salesforce.com Make Profits?

I recently syndicated a Technology Stocks column to Seeking Alpha. It was titled Salesforce.com’s Platform Strategy Holds Immense Promise. The argument was as follows:

Salesforce has benefited tremendously from its platform strategy. There is still enormous headroom for it to grow in this arena, and I don’t think the opportunity is lost on Marc Benioff. Judging by its recent investment in Apttus, a company that has built on the Force.com platform, and has become quite successful, Salesforce is aware of the vast potential of the platform strategy. Investing aggressively in incubating these start-ups would yield handsomely for the company.

The Seeking Alpha article generated a ton of comments, mostly asking why am I bullish about a company that never generates profits.

Salesforce.com has been wildly successful – look at the 10-year chart and the accompanying revenue growth making it the largest CRM player in the market, up from virtually nothing 10 years ago. It did $3 billion in revenue last year and will do $4 billion this year. When the company achieves scale we should see the 30-40% operating margins we see at ORCL /SAP. Software companies must spend a ton on marketing to generate 25-30% organic growth and can’t generate operating profits while doing so. BUT looking forward to 2015-2016 we should have $6-7 billion in revenue and $2 billion in operating profits. Thus, the $33-34 billion valuation (fully diluted), while expensive, isn’t necessarily crazy. And we’ve got a lot of momentum.
>>>