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The campground for business reopened for the first time since the pandemic in September welcoming business leaders, MVPs, Trailblazers, developers and yes, even us analysts back to the familiar embrace of the forest. Truth be told I was expecting more of a “first day of camp” excitement vibe running through the crowd. Instead, what I felt was an intense desire to get back to the work of running a business on Salesforce.
Analyst Blog
In the next few years, the soaring demand for customised verifiable credentials (VCs) means we’ll see the emergence of managed services to deliver them. How might these managed services work? There’s a solid precedent.
VCs are increasingly being used for everything from digitised vaccination certificates to records of educational achievements. As they come to be used for more applications at a variety of scales, economies of scale will make it inevitable that the management of the VCs themselves, and all the associated security measures, will be provided as a service.
Analyst Blog
On October 28, 2019, Elon Musk's tweet read: “I hate advertising.” On October 27, 2022, Elon Musk completed his much ballyhooed and debated acquisition of Twitter.
Analyst Blog
Last night at the 12th annual awards Gala at CCE, our team unveiled the winners of the 2022 SuperNova Awards. This year's winning teams and leaders particularly stood out for their business impact, creativity, and ability to lead sustaining innovation amidst rising inflation, a looming recession, and a post-pandemic environment.
Analyst Blog
Global Teams Recognized for Stunning Digital Initiatives, Utilizing Innovative TechnologiesPALO ALTO, Calif. – October 26, 2022 – Constellation Research, Inc. today announced the winners of its 12th annual SuperNova Awards, a prestigious recognition for teams building innovative and disruptive programs to create business transformation. The winners were announced at the company’s annual conference Connected Enterprise on October 26.
Press Release
All Eyes On Digital Giant Earnings
With recession headwinds driving lower valuations and earnings uncertainty in high gear, the level of fear remains high. However, in the past week, NASDAQ was up 5.2%. So the big question,will these digital giants hold their gains ahead of earnings season?
The MATANA (Microsoft, Apple, Tesla, Alphabet, Nvidia, Amazon) set have seen a big lift lately despite market cuts to valuations. As many astute readers know, the general progression of recession comes down to five major stages:
Stage 1: Valuation cuts
Stage 2: Earnings misses
Stage 3: Credit and liquidity crunches
Stage 4: Unemployment increases
Stage 5: Real estate crashes
In general, the big tech set have managed to make their earnings in the past quarter and all indications show that they will likely do so in Q3. However, high interest rates, inflation, strong dollar, and continued global uncertainty cloud this earnings session. The good news, markets have mainly remained in Stage 1 with a few Stage 2 signals.
SNAP was a good indicator not on big tech, but on the impact of digital advertising and social networks. Their earnings impact Meta and Twitter more than Google or Amazon, the top ad player and third ranked ad player respectively. In general, most stocks have not passed into the Stage 2, but this quarter could be telling.
Here's What To Expect For Q3
10/25 Earnings
Google – all eyes on the search ad business as many advertisers have cut spending. Most experts do not expect the growth in cloud to offset drops in advertising, but the growth will help overall earnings. Unlike Snap, search advertising revenue often fares better in a downturn than social network advertising.
Microsoft – Many gurus expect strong overall Azure cloud business and intelligent cloud business. Most analysts expect Azure to keep slowing. With PC sales down, that part of the business and Xbox are under pressure to perform. Ad business growth is expected and the continued shift to hybrid work will power much of the momentum for Microsoft. Investors continue to eye dividend payouts from Microsoft.
10/26 Earnings
Meta – slow user growth and declining ad growth will be the head winds. Snaps’ numbers have investors very worried. The increasing R&D costs to create the metaverse vision will continue to weigh on Meta's earnings amidst layoffs and cost reductions.
10/27 Earnings
Amazon – the digital giant is in a rebuild phase as the core amazon.com business faces losses, The retooling of logistics and warehouses to meet declining demand is in motion. These actions will help overall profitability going forward. Fortunately, the cloud business via Amazon Web Services is still growing at a 30 to 40% growth rate and will likely maintain momentum.
Apple – While iPhone 14 Plus sales are lower than expected, iPhone 14 Pro and Pro MAX remain strong in sales. Consumers appear to want high the premium models for their upgrade amidst the upgrade supercylcle of almost 800M iPhones to 5G. Carrier incentives have had a major impact in fueling demand. Most industry watchers expect the services business to increase growth.
The Bottom Line: Fed Rate Hikes Priced In As Market Has Most Likely Hit Floor
The market optimistically hopes that the digital giants can show that earnings remain strong and that guidance reflects their continued ability to grow. Any wavering in expectations will send the market back to a 10,700 floor on the NASDAQ. However, if these big tech names continue to meet earnings targets, the market will have found its floor and the worst will have passed. The only wild card - future Fed hikes past 100 basis points in November. This week will set the tone for the rest of the year.
Your POV
When do you think we will hit bottom? Are big tech stocks coming back? What's your view for 2022 vs 2023?
Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org. Please let us know if you need help with your strategy efforts. Here’s how we can assist:
Developing your metaverse and digital business strategy
Connecting with other pioneers
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing
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Disclosures
Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy,stay tuned for the full client list on the Constellation Research website. * Not responsible for any factual errors or omissions. However, happy to correct any errors upon email receipt.
Constellation Research recommends that readers consult a stock professional for their investment guidance. Investors should understand the potential conflicts of interest analysts might face. Constellation does not underwrite or own the securities of the companies the analysts cover. Analysts themselves sometimes own stocks in the companies they cover—either directly or indirectly, such as through employee stock-purchase pools in which they and their colleagues participate. As a general matter, investors should not rely solely on an analyst’s recommendation when deciding whether to buy, hold, or sell a stock. Instead, they should also do their own research—such as reading the prospectus for new companies or for public companies, the quarterly and annual reports filed with the SEC—to confirm whether a particular investment is appropriate for them in light of their individual financial circumstances.
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Analyst Blog
DisrupTV Episode 298: Tom Peters & Mindy Weinstein on Leadership, Scarcity, and the Human Element
In Episode 298 of DisrupTV, hosts R "Ray" Wang and Vala Afshar engage with renowned business author Tom Peters and marketing expert Mindy Weinstein. The conversation delves into the evolving landscape of leadership, the psychological impact of scarcity in marketing, and the significance of human-centered approaches in achieving excellence.
Video
What is in the news: ServiceNow acquires Era Software for undisclosed terms. ServiceNow acquired Lightstep last year in May (2021) and it’s strengthening its observability portfolio with this acquisition. I had a briefing from Ben Sigelman, GM, Lightstep division of ServiceNow, and Todd Persen, CEO of Era Software.
Analyst Blog
Offering Overview
Enterprises emerging from the worst of the COVID-19 pandemic seek greater flexibility and more automation in their enterprise resource planning (ERP) solutions. Leaders need to easily access data, enable self-service capabilities, and intelligently automate processes. The most common requests in vendor selection decisions center on analytics, automation, and artificial intelligence (AI).
Offering Overview
This Offering Overview examines Microsoft’s Dynamics 365 Commerce and Microsoft Cloud for Retail in the all-in-one commerce clouds market.
Best Practices
The onset of the COVID-19 pandemic forced businesses to move online faster than they desired rather than evolving or improving their progression to digital maturity.
DisrupTV Episode 297: Sanjib Sahoo, Jon Reed & Joel Bines on Digital Transformation, Media Disruption & Consumer-Centric Strategies
In Episode 297 of DisrupTV, hosts R "Ray" Wang and Vala Afshar engage with industry experts to explore the future of digital transformation, the impact of media disruption, and the importance of consumer-centric strategies in today's business environment.
Key Takeaways
1. Embracing Digital Transformation
Video
Guiding in Leadership, Sales & Business Growth, and Management Logistics PALO ALTO, Calif. – October 17, 2022 – Constellation Research announced the appointment of Ray Jan as vice president and chief operating officer to manage daily operations, grow domestic and global sales, and lead business development.
Press Release
Innovating Amid Disruption: AI, Social Impact & Global Leadership – DisrupTV Episode 296
In Episode 296 of DisrupTV, hosts R “Ray” Wang and Vala Afshar are joined by three global leaders:
Video
Elevating Brands, Belonging & Personal Impact: DisrupTV Episode 295 with Teresa Barreira, Brian K. Reaves & Cindy McGovern
In Episode 295 of DisrupTV, hosts R “Ray” Wang and Vala Afshar sit down with three visionaries:
Video
Leading Boldly: Digital Transformation, Agile Growth & Risk as Opportunity – DisrupTV Episode 294
In Episode 294 of DisrupTV, hosts R “Ray” Wang and Vala Afshar are joined by three exceptional leaders shaping the future of business:
Video
Constellation analyst Doug Henschen recaps the big highlights on the analytics front at Dreamforce 2022, with Salesforce CRM Analytics and Tableau taking center stage.
Video
Future-Proof Leadership: AI, Entrepreneurship & the Stories That Shape Us – DisrupTV Episode 293
In Episode 293 of DisrupTV, hosts R “Ray” Wang and Vala Afshar engage with three visionaries exploring how technology, history, and narrative shape our future of leadership:
Video
Workday executives and customers detailed the evolution of the company’s ‘plan, execute, analyze’ platform at Workday Rising 2022 in Orlando.
In what seems like a wrinkle in time, it has now been four years since Workday acquired Adaptive Insights (since renamed Workday Adaptive Planning). Funny how a pandemic can help to make time fly.
Analyst Blog
Disintermediate Or Be Disintermediated!
On September 15, 2022, Adobe announced the largest acquisition of a private software company and the largest acquisition in Adobe’s history. In a half cash, half stock deal for approximately $20 billion, San Francisco-based Figma would be acquired by San Jose-headquartered Adobe. Adobe is paying a 50 times annualized recurring revenue (“ARR”) multiple for Figma which is expected to surpass $400 million in ARR exiting 2022.
Analyst Blog