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Digital Giants Market Analysis: Part 1 - Inside 11 Digital Giants Headed For IPO, DPO, or SPAC rwang0 Sun, 03/07/2021 - 00:01
Emerging Digital Giants Are Set For Some Big Debuts
Established digital giants such as the FAANGs + Microsoft have shown the power in dominating markets and moving beyond digital transformation. Emerging digital giants such as AirBnB, DoorDash, Disney, Etsy, Grubhub, Lyft, Spotify, Uber, and Walmart have shown the most growth in the winner takes all, post-pandemic markets. If leaders haven't figured it out, digital transformation is not enough. In fact, it may even be the wrong game.
Successful digital giants have applied digital business models, built new digital monetization models, and improved their digital channels. What can not be overemphasized is how these emerging digital giants exemplify the five traits of building 100 year data driven digital network (DDDN) platforms:
Build the biggest network. Create the largest active member community or device network, > 50M preferred.
Own the customer relationship. Disintermediate existing relationships by taking account control through payments, ease of use, and offering aggregation.
Compete for data supremacy. Design data driven digital networks to compete for data supremacy and decision velocity to create a competitive advantage.
Deploy digital monetization models. Build out ad, search, goods, services memberships, and subscriptions.
Enter the market with a long-term growth mind set. Trade profits for market share growth and trade short term gains for long term investments to dominate the value chain.
IPO and Direct Listing Markets Set For Another Record Year
Despite the pandemic, 2020 emerged as a record setting year for IPOs. More than $174 billion was raised among 494 IPOs. The overprinting and borrowing by the US Federal Reserve and other central banks has led to massive devaluation of currencies. Investors have flocked to equities in their quest for yield. Digital Giants have fared the best over the past decade. In 2021, AirBnb and Doordash have led the way. Below are some of the big debuts for 2021 as of March 1st, 2021.
Part 1:
AppLovin
Ascensus
Coinbase
Coupang
Epic
Part 2:
Instacart
Nextdoor
Robinhood
Roblox
Starlink
Stripe
1. AppLovin ~$4 billion valuation
Founded in 2011, Palo Alto-based AppLovin is a mobile game developer, marketing tool provider, and digital goods platform in a hot gaming market worth almost $80 billion in 2020. Revenue jumped 46% (YoY) in 2020 to $1.45 billion. In February 2021, AppLoving bought Berlin-based developer Adjust and added 500 employees, bringing the total headcount to 2500.
Status: 2021Q2 Target Date, IPO Filed 3/9/2021, To Be Listed on NASDAQ
Leadership: Adam Forough, CEO and Co-Founder
Investment relationship - NO
Individual owned - Yes
Family owned- NO
Company owned - NO
Five Core Tenets Of Digital Giants
Network: 32 million daily active users (DAU) on over 2 billion devices
Customer Control: Freemium model on 200 games from 12 studios
Data Supremacy: Mining user behavior and analytics.
Digital Monetization: Sales of digital goods. Over 51% of revenue came from digital goods and 49% of revenue came from software and marketing tool sales.
Growth Mindset: Quadrupled spending on R&D, created a publishing division in 2018 and expended $1 billion in acquisitions and partnerships including Machine Zone, Magic Tavern, Adjust.
2. Ascensus ~$3 billion valuation
Dresher, PA based financial services concern manages savings plans, health savings accounts (HSAs), retirement programs, and 529 college funds. Ascensus is the largest independent record keeping services provider, third-party administrator, and government savings facilitator in the United States. The firm has over 12 million customers with $327 billion in assets under management (AUM). Barclays and Goldman Sachs have been selected to underwrite the IPO.
Status: 2021Q3 Target Date, IPO
Leadership: David Musto, CEO
Investment relationship - NO
Individual owned - NO
Family owned- NO
Company owned - NO
Network: 12 million customers
Customer Control: Plan aggregation, technology platform provider
Data Supremacy: Analytics and insight on participant behavior
Digital Monetization: Plan fees at scale
Growth Mindset: Stable long term expansion.
3. Coinbase (COIN) ~$95-100 billion valuation
As the leading cryptocurrency exchange, San Francisco based Coinbase has benefited from the rapid ascent of Bitcoin, Ethereum. Coinbase dominates US based cryptocurrency exchanges with a 24-hour trading volume of $3.2 billion. A recent private auction valued shares at $350, raising market caps to almost $100 billion.
Status: 2021Q1 Target Date, Filed 2/25/2021, Direct Listing on NASDAQ
Leadership: Brian Armstrong, CEO & Co-Founder; Fred Ehrsam, Co-Founder
Investment relationship - NO
Individual owned - NO
Family owned- NO
Company owned - NO
Network: 43 million customers, 2.8 million customers making transactions
Customer Control: Aggregation of cryptocurrencies for single point of trade
Data Supremacy: Analytics and insight on participant behavior
Digital Monetization: Transaction fees drive $1.14 billion in revenues for 2020, up 136% (YoY)
Growth Mindset: Investment in order book exchange (GDAX), brokerage, and custody technology
4. Coupang (CPNG) ~ $80 billion valuation
Harvard Business School drop-out Bom Suk Kim is set for one of the biggest tech IPO's for the year. Founded in 2010, Coupang started out as a Groupon copy-cat, focusing on daily deals and has emerged into an eCommerce digital giant. Coupang has emerged as a pandemic and post-pandemic winner by nearly doubling its revenues to $12 billion in 2020. As with all digital giants, the entity has an accumulated deficit of $4.12 billion as of December 2020 and has taken a long term mindset, building for market share and growth first. Should the expected March 10th listing be successful, Korea's e-commerce darling will have a $51 billion valuation (based on $28.50 per share pricing) and emerge as one of the top 5 companies by market cap in South Korea. The US listing will benefit Coupang with dual class voting structures, a key to a long-term mindset and one of the five tenets of building a Digital Giant. New business models in Coupang Pay for financial services and Rocket Fresh for food delivery.
COUPANG - BUY $80
Status: March 11, 2021, Filed 2/25/2021, Direct Listing on NASDAQ
Leadership: Bom Kim, CEO & Founder
Investment relationship - NO
Individual owned - NO
Family owned- NO
Company owned - NO
Network: 14.85 million active users
Customer Control: Ease of use in ordering, Amazon approach to market place, last mile delivery.
Data Supremacy: AI and ML investments designed for operational efficiency from pricing to distribution and logistics.
Digital Monetization: Goods, services, payments, ads (future)
Growth Mindset: Dual class - voting structure, significant technology investment, long-term bets on last mile distribution. Market share increased 24.6% in 2020 up from 18.1% in 2019.
5. Epic Games
Founded in 1991, Epic Games is a Cary, NC based video game maker responsible for some of the most popular titles such as Fortnite, Infinity Blade, and Gears of War. The company has created more than 50 game titles and purchased the mobile gaming app House Party. It's game development platform, Unreal Engine, has significant mind share among game developers. A war with Apple on app store transaction fees may play a role in a lower potential valuation. As one of the few privately held gaming companies left, investors and fans would love to see this company IPO and tap into the broader market of gaming, e-sports, marketplace, and digital goods.
Status: No Immediate Announcements
Leadership: Tim Sweeney, CEO & Founder
Investment relationship - NO
Individual owned - NO
Family owned- NO
Company owned - NO
Network: 350 million active users
Customer Control: Addictive games, strong community engagement, and rich developer support.
Data Supremacy: Analytics and data are foundational to eSports and gaming. Epic has a sophisticated approach to monetizing user data to improve games and create new offerings.
Digital Monetization: Freemium to monetization of in-app purchase, V-bucks virtual currency, digital goods (e.g. Battle Passes)
Growth Mindset: Moved from gaming, to platform, to digital monetization, to lifestyle brand.
Your POV
Ready for the new crop of Digital Giants as they IPO? Which IPO do you think will do well? Find out how these digital giants are competing at the dawn of digital giants. Pre-order the book and find out how Everybody Wants To Rule The World t
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 AI and Digital Business transformation efforts. Here’s how we can assist:
Developing your 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
Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.
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.
Copyright © 2001 – 2021 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network
Analyst Blog
News Analysis: Coupang, South Korea's Digital Giant, Set For A $51 Billion+ Debut rwang0 Sat, 03/06/2021 - 16:44
Digital Giant Seeks $3.6 Billion Raise
Harvard Business School drop-out Bom Suk Kim is set for one of the biggest tech IPO's for the year. Founded in 2010, Coupang started out as a Groupon copy-cat, focusing on daily deals and has emerged into an eCommerce digital giant. The Korean born, New Englander, studied in the US, trained at Boston Consulting Group, and founded the 02138 magazine startup all before heading back to Korea to build an Amazon like "next geneartion e-commerce model".
Source: Korea Daily Times
So far, the market has had a healthy reception to the listings of emerging digital giants, with AirBnB and DoorDash completing highly successful debuts. Coupang has emerged as a pandemic and post-pandemic winner by nearly doubling its revenues to $12 billion in 2020. As with all digital giants, the entity has an accumulated deficit of $4.12 billion as of December 2020. Should the expected March 10th listing be successful, Korea's e-commerce darling will have a $51 billion valuation (based on $28.50 per share pricing) and emerge as one of the top 5 companies by market cap in South Korea. The US listing will benefit Coupang with dual class voting structures, a key to a long-term mindset and one of the five tenets of building a Digital Giant.
The Seoul headquartered company has six global offices in Beijing, Los Angeles, Seattle, Shanghai, Shenzehn, and Silicon Valley. At the heart of Coupang is an online marketplace for merchants like Shopify, a shopping portal for consumers like Amazon, and a supply chain logistics distribution network like JD.com. Coupang has 15,00 drivers with the largest last-mile logistics fleet in South Korea, and 100 fulfillment and logistics centers in over 30 cities. Almost 70 percent of the country lives within 6 miles of a Coupang delivery center.
Coupang has followed the digital giant model of investing for the long term with massive technology investments in machine learning and AI to deliver on personalization at scale, inventory procurement, risk management, last mile logistics, and pricing optimization.
Key investors include Softbank Vision Fund (SVF) with a 39.4 percent stake, Greenoaks Capital Partners with a 19.8 percent stake, Maverick Holdings with a 7.7 percent stake, Rosa Park Advisors with a 6 percent stake, and Black Rock with a 3.7 percent stake. Revenue per active customer has risen from $161 in Q4 2019 to $256 in Q4 2020. Coupang has grown active user from 9.16 million in 2018 to 11.79 million in 2019. In 2020, Coupang reached 14.85 million active customers. Goldman Sachs, Allen & Company, JP Morgan Securities, and Citigroup Global Markets are among the nine underwriters for this IPO.
The Bottom Line: This Digital Giant Dominates The Korean Market
Constellation estimates South Korea's e-commerce market to grow to $250 billion by 2026 from $129 billion in 2019. With just a little more than one-third penetration of the 43 million South Koreans above the age of 15, Coupang has built a sizable network. As with all Digital Giants (Get my latest book Everybody Wants To Rule The World to find out more), the business model and monetization models can expand with the investment in a a 100 year platform and strategic expansion into new offerings. Following the lead of Asian Digital Giants (i,e. Alibaba, Baidu, JD.com, and Tencent), expect Coupang to build on its expansion into:
Financial services - Coupang Pay.
Food delivery - Rocket Fresh
Coupang has a shot to move beyond the confines of Korea as it will need to grow its network. Expect the IPO proceeds to be used for expansion as this emerging Digital Giant enters its next phase of growth.
Your POV
Will you build, partner, or perish in a world of digital giants? Let me know what you think about Coupang and their model? Better yet, pre-order the book and learn the secrets of the world beyond Digital Transformation, get my latest book Everybody Wants To Rule The World t
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 AI and Digital Business transformation efforts. Here’s how we can assist:
Developing your 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
Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.
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.
Copyright © 2001 – 2021 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network
Analyst Blog
News Analysis: Wipro Doubles Down On BFSI With $1.45 Billion Capco Acquisition rwang0 Sat, 03/06/2021 - 15:42
The Battle For The Hearts And Minds Of BFSI Clients Just Got Interesting
On March 4th, Bengaluru headquartered, global IT services giant, Wipro, signed an agreement to acquire UK-based Capco, technology and management consulting firm in an all cash transaction for $1.45 billion. The acquisition gives Wipro a stronger footing in the highly lucrative banking, financial services, and insurance (BFSI) market where Capco brings $700 million in revenue, 5000 members of the workforce, 30 new large BFSI clients, and a book of business with 100 clients in 30 countries.
Thierry Delaporte, CEO and Managing Director of Wipro Limited, noted "that Wipro and Capco shared complementary business models".
The BFSI market has been the most stable and most lucrative industry for IT services firms. Capco brings management consulting, digital transformation, and technology core services to the table. Customers work with Capco on strategy to security, cloud migration to business model monetization. This end-to-end approach will add to Wipro's scale in application development, compliance, risk management, testing, and other offerings. A successful post-merger integration will enable Wipro to accelerate into the higher value and higher margin offerings and improve market share with existing and new clients.
The Bottom Line: Thierry Delaporte Is Very Serious About Growing Wipro
Over the past decade, Wipro had seemed less competitive in the BFSI market when compared to Cognizant, TCS, and Infosys. The Capco acquisition puts Wipro back into the mix of short list candidates. Moreover, Capco's presence adds scale and permission for Wipro to be among the top 3 players and gives Wipro the brand permission to cross-sell capabilities into the market.
While this may seem as a direct BFSI play, Capco, founded in 1998, has also developed a thriving energy practice with transformation of utilities, oil and gas, and commodity trading and risk management. Wipro will also gain a significant foot hold in the rapidly growing and very critical low carbon, clean energy, and energy tech space.
In less than seven months, Delaporte has cut costs in the management ranks, improved operating margins, re-invested in sales teams, and has executed the largest acquisition in Wipro's history. With three months left in his first year, customers, partners, and employees are wondering what else will be in play as Wipro enters into a growth posture.
Your POV
Are you a Wipro client? Do you think Capco will add to your loyalty to Wipro? Are you a Capco client? Do you feel this will be a good acquisition for Wipro given Wipro's track record in acquisitions?
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 AI and Digital Business transformation efforts. Here’s how we can assist:
Developing your 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
Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.
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.
Copyright © 2001 – 2021 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network
Analyst Blog
Energy Innovation, Product Strategy & The 'Working Backwards' Methodology | DisrupTV Ep.
Video
Premium Research
Executive Summary
What does it mean to lead? This was a central question as Constellation Research analysts gathered (virtually) to vote for chief executive officer (CEO) of the year for our annual Enterprise Awards. The nominees all steered their businesses through periods of massive upheaval and opportunity. Each one was tested beyond the traditional ups and downs of an average year.
Analyst Blog
Monday's Musings: Inside Why The Mainframe Is Alive And Thriving rwang0 Sun, 02/28/2021 - 22:34
Mainframes Still Going Strong After 70 Years
Mainframes entered the market in the early 1950's when IBM and the seven dwarfs (Burroughs, Unisys, NCR, Control Data, Honeywell, GE, and RCA) created the computing age and competed for critical applications, sophisticated modeling, and large-scale transactions and workloads among the large organizations. Over the past seven decades, compute power, storage, and networking have seen various waves of centralization and decentralization amidst each wave of disruptive technology adoption.
Analyst Blog
Digital Transformation, Customer Empathy & CMO Leadership | DisrupTV Ep. 225
In DisrupTV Episode 225, hosts R “Ray” Wang and Vala Afshar are joined by three influential voices: Nigel Vaz, CEO of Publicis Sapient and digital transformation expert; Michelle Huff, Chief Marketing Officer at UserTesting and customer empathy evangelist; and Larry Dignan, Editor-in-Chief at ZDNet and thought leader on tech trends.
Video
ConstellationTV is here to bring you the latest in what is disruptive and reshaping business and technology. In every episode, you’ll hear from our fellow analysts, from leaders across our network of business transformation experts and influencers, as well as from cutting edge vendors.
Video
News Analysis: Big State vs Digital Giants Battle Over News Access And Compensation rwang0 Mon, 02/22/2021 - 09:16
Sharing Links Is The Foundation Of The Internet
When Tim Berners-Lee set the specifications of URLs, HTTP, and HTML protocols for the world wide web, he set off how information would be shared on the internet. In fact, the foundation and spread of the internet has come from the free sharing of internet links across a free and open internet. The sharing and compensation of these links is at the heart of the battle among governments and news publishers with the digital giants.
Over the past few weeks, the digital giants (i.e. Google and Facebook) have faced a standoff over how news organizations and their content would be compensated for access to social media networks as well as search engines. The battle came to a heated frenzy when Google agreed to compensating news organizations and Facebook decided to pull news feeds and links from their Australian users. The recent news of Canada following suit with Australia has brought this issue to the forefront.
The Business Models Of Journalism Have Not Fared Well In A Digital World
At the center of the battle is the business models and monetization models among content (i.e. news organizations), network (i.e. the reach of the internet with social networks and media), technology platforms (i.e. digital giants), and consumers. The news organizations feel their content is what draws the social networks and search giants, yet the data would show that only 2 to 4% of content used by social networks come from these content providers. Anywhere from 1 to 3% of searches are news related for the search giants. For the digital giants, they provide access to their networks and distribution platforms as a service to the publishers and news organizations and feel that they should not compensate them for this valuable access to billions of users.
In the case of Australia, over 75% of the population receive their news from social media. In fact, in most countries that number is higher. Hence the conundrum. The biggest network for journalism and news content distribution is unfortuantely through a third party that competes with news organizations for digital advertising. News organizations and digital content producers are subservient to the digital giants who have the network and the technology platform. In fact, these digital giants are crushing content publishers in the amount of digital ad revenue generated. Google generates almost $147 billion in ad revenue in 2020. Facebook almost reached $70 billion in ad revenue for 2020.
In the case of Google in Australia, the move to pay the biggest publishers has given the larger publishers an advantage over the smaller ones. While this has put Facebook on the defensive, Facebook has every legal right to not only charge for access to their network, they also have the right to determine whom they want on their network. Paying publishers for sharing their links on Facebook's own network is counterintuitive. In fact, Facebook's social network of 2.7 billion users and the 14 million users in Australia is what attracts the publishers to want to share their links and drive traffic to their own sites. To be clear, the news is not the what attracts Facebook users to the community, it's the sharing of free content among other free users, including news links.
Digital Giants Face Massive Regulation By Governments "Seeking Their Fair Share"
What we have now is a challenge to the internet and digital giants on behalf of the governments around the world who want to take on big tech AND the failure of the ad supported and subscription market for journalism. While it may be popular to hate on the digital giants for their success and governments would like to get a cut in on the action on behalf of news organizations and journalism, the challenge is finding a fair approach that will enable smaller publishers to succeed as well as the large ones while respecting the first principles of the internet, the free sharing of links.
For decades publishers failed to invest in their social networks and relied on digital giants to do the dirty work of building out their communities and membership base. In fact, many content publishers built business models on classifieds, pay to play content, and events. However, few of these models achieved success. For every New York Times and Wall Street Journal subscriber paywall, there were about 50 organizations that were merged, acquired, or gone bankrupt since 2020. In fact, sites such as Craigslist decimated local news organizations.
With Digital Giants succeeding in disrupting traditional industries such as journalism and generating massive profits, legislators around the world now seek any opportunity to insert themselves to play a populist role in "regulating" for free and fair markets while taking a cut of the profits. Taxes and regulations are one way to keep digital giants in check, but these rules should be carefully thought out to protect personal privacy, enable fair and free markets, and keep innovation alive. There is an outright danger legislators will move to far in regulation and stifle the innovations provided as a public good.
The Bottom Line: The Future of Journalism Is At Stake But Regulations For Digital Giants Must Be Smartly Crafted
Societies around the world need a strong, fair, and free press in order to build healthy communities. The digital giants have played a role. Just a decade back, social media companies provided a great distribution channel and was a "savior" to journalism. Why? In lieu of investing in one's own community, these content providers could piggy back on top of the networks and drive traffic back to their sites. Unfortunately, the business model of journalism required scale to succeed. Unless you were a funded model such as the BBC or NPR to some degree, scale was very hard to achieve. Media properties found community even harder to build and maintain.
This move to go after Digital Giants is world wide. Their success and failure of many digital giants to engender trust and convey value have placed the big tech firms squarely in the bulls eye of aspiring regulators and elected officials From China to the EU and now Australia, Canada, and the US, states want to take back the power they ceded to Digital Giants. The fight over news is just one front on that battle. Digital giants can expect more fights ahead as governments around the world fear the growing power of these digital giants and seek to add more controls in the public interest.
The policies determined around access to platforms by journalism and content providers will continue to be a battle waged by regulators. Digital giants and regulators must come to terms as the value of the network comes from a wide variety of content sources such as news, user generated data, games, media, entertainment, education, etc. Policies created for one type of source around monetization will have consequences for other sources. Smart regulation is needed amidst this popular backlash or digital giants will find themselves in unsustainable business models and monetization schemes.
For more about digital giants, get my latest book Everybody Wants To Rule The World where we go deep on the digital giants and what's needed to build, partner, or perish.
Your POV
Do you think the Digital Giants will weather the storm against governments and the populist backlash? Will news and journalism fix their broken business model? Who's approach is better Google? or Facebook?
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 AI and Digital Business transformation efforts. Here’s how we can assist:
Developing your 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
Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.
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.
Copyright © 2001 – 2021 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network
Digital Giants
News Analysis
Analyst Blog
Premium Research
Executive Summary
AI, Annotation Ethics & Innovation Foresight: Mastering Digital Trust | DisrupTV Ep. 224
In DisrupTV Episode 224, hosts R “Ray” Wang and Vala Afshar welcome three visionaries charting the future of enterprise innovation:
Video
Today, we launched the final set of updates to our Constellation ShortList™ portfolio, including 22 new and updated lists.
Each technology vendor on this list has been chosen based on their products and services offering. Our analysts consider technology investment, use cases, strategic vision, customer value, executive leadership and price when anointing a vendor to the ShortList™.
Check out the 22 new and updated lists:
Analyst Blog
Event Report: Accenture's Technology Vision 2021 #TechVision2021 rwang0 Tue, 02/16/2021 - 23:44
Leaders Wanted For The Post Pandemic Future
On February 17th, 2021, Accenture released its 2021 Technology Vision report. Paul Daugherty, Group Chief Executive - Technology & Chief Technology Officer; Marc Carrel-Billiard, Senior Managing Director, Innovation Global Lead; and Michael Biltz, Managing Director, Technology Vision shared results from their survey of 6,241 C-level executives and directors at companies across 31 countries and 14 industries. The report revealed the dire need for technology leadership required to emerge in the post pandemic environment. As quoted in the report, "During the pandemic, it became starkly clear that there is no leadership without technology leadership". Some key findings from the annual survey include:
90% of respondents believe they needed to fast forward their digital transformation with cloud at the core
63% of executives report that the pace of digital transformation is accelerating
83% of executives agree that their organization’s business and technology strategies are becoming inseparable—even indistinguishable
2021 Technology Vision Trends Enable A Better Future
The five big trends for 2021 include (see Figure 1):
Stack strategically. The technology stack architecture emerges as a competitive advantage or liability. Organizations are elevating the need "to build and wield" the most competitive technology stack. Organizations must move from reducing technical debt to accumulating technical wealth.
Mirrored world. The digitization of the physical world ushers in a new era of digital twins. These digital twins will drive living models of factories, supply chains, buildings, and ecosystems. Trusted data practices provide the foundation for a mirrored world success.
I, technologist. Democratization of technologies through automation, low code platforms, natural language processing, and computer vision means everyone can become a technologist. How organizations enable and empower all types of workers to collaborate will determine the organization's future. Organizations must create a supportive culture to enable grass root technologists to innovate.
Anywhere, everywhere. Organizations must support the bring your own environment (BYOE). The role of human machine interaction plays a greater role in the future. Culture must match the organization's objective.
From me to we. Digital partnerships will help companies provide a path out of the chaos. Multiparty systems showcase who future networks bring win-win value propositions.
Figure 1. The 2021 Accenture Technology Vision Trends
Source: Accenture
The Bottom Line: Compressed Digital Transformation Is The Post Pandemic Reality
The post pandemic playbook will require a closer alignment of business and technology. The new business models and monetization models require that every organization build mastery on five levels:
Cloud
Process
Analytics
Automation
AI
Mastery of these five elements provide leaders the foundation for not only digital transformation, but also the ability to compete with the emerging digital giants for the monetization of networks via ads, search, products, services, memberships, and subscriptions. Successful projects in digital transformation and a post pandemic recovery will require technology leadership at the leadership level.
Your POV
How are you doing with your digital transformation efforts? Which of the five trends resonates with you the most?
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 AI and Digital Business transformation efforts. Here’s how we can assist:
Developing your 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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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.
Copyright © 2001 – 2021 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network
Event Report
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Digital Transformation, Customer Experience & Innovation Leadership | DisrupTV Episode 223
In DisrupTV Episode 223, hosts R “Ray” Wang and Vala Afshar engage with three influential leaders:
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Event Report: Microstrategy World - Enterprise Bitcoin and The Future Of Digital Networks rwang0 Tue, 02/09/2021 - 21:50
The Outsized Influence Of Central Banks Have Changed How CEO's View Reserved Assets
On February 3rd, 2021, Microstrategy held their annual Microstrategy World Conference. The event typically celebrated the role of analytics and business intelligence. However, in August 2020, Microstrategy moved its cash reserves into Bitcoin. At the conference, the conversation around Bitcoin was prevalent and top of mind. In fact, the company doubled down on the future of Bitcoin with full tracks on how enterprises should use the cryptocurrency as CEO and founder Michael Saylor and COO Phong Le shared their experiences with the virtual audience.
"The keynote fireside chat with Microstrategy CEO - Michael Saylor and Ross Stevens, CEO of Stoneridge Capital abd Founder, Executive Chairman of bitcoin player NYDIG, was the biggest highlight of the conference and probably the best keynote of any enterprise software conference in the past 12 months."
The central argument behind Bitcoin's rise and the need for CEO's to pay attention can be summarized in 7 ways:
The CEO's most important jobs comes back to capital allocation.
Central banks around the world have capitulated to politicians around the world by setting interest rates at near zero and in some cases below zero.
Cash is no longer an asset, it has become a liability as it rapidly becomes devalued,
Central banks can control the supply of money but they cannot set the value of money.
When risk of a currency is no longer priced, the market will set a price by moving into other assets that increase in value or devalue at a slower rate
Central banks are out of control and continue to print money
CEO's must determine how to de risk their cash holdings with assets that are not being devalued.
As one can imagine, non-asset owners are the most vulnerable as they will be left behind. This major shift in thinking about the weakness of fiat currency will lead to a generational shift to more stable assets and restricted supply assets such as Bitcoin.
Bitcoin Plays A Key Role In Protecting Reserved Assets
As unlimited printing of fiat currency endangers the global financial system, forward thinking organizations will consider Bitcoin as part of their reserved asset strategy. Why? Traditional corporate finance and conservative financial manager types have often moved to precious metals such as gold and silver as a hedge. Pricing of these metals have been based on supply and demand. For example, gold grows at 2% per year while the supply of silver grows 20 to 30%. Bitcoin has a finite supply where only 21 billion bitcoins that will ever be mined.
As supply moves asymptotically to zero, the value continues to rise. When gold is compared to Bitcoin on supply alone, the limit of Bitcoin will make the cryptocurrency exponentially more rare in supply than gold. More importantly, Ross Stevens astutely pointed out that "Bitcoin is the first stored value asset and currency where supply is completely unaffected by demand." One will not be able to print or make more when the final Bitcoin is mined.
In addition to the value of Bitcoin in the long run, Ross Stevens pointed out a few other factors that make Bitcoin a better reserved asset today and a future open source decentralized value exchange network in the future:
Bitcoin is easier to move and transact. As a digital currency, bitcoin is easy to move and transact. Final settlement is in milliseconds not days or in some cases months. Banks and parties don't have to worry about debt nor credit risk.
Bitcoin is an electronic bearer asset meets open source monetary data driven digital network (DDDN). Transacting parties can achieve final liquidity in any currency pair.
People to people (P2P) transactions can occur in an open source monetary network. Intermediaries in the financial network are rendered useless as global trade, credit card transactions, remittance markets, and individual payments can interact with no merchant fees, financial fees, or currency exchange charges.
Bitcoin ensures that money is preserved as a global property right. Anyone in the world can use the open source monetary network to transact with confidence and finality.
Why Organizations Will Move Their Reserved Assets to Bitcoin
During the fireside chat, Ross made a compelling argument as to why organizations have and will continue to move their reserved assets to bitcoin. He asked a compelling question, "What do we have to believe to be true to move to Bitcoin for reserves?"
Dollar depreciation vs Bitcoin will exacerbate. Dollar has declined 80% in the past two years and 30% in the past year.
Move to Bitcoin will create exponential end state economics. While not risk free, organization's who move to Bitcoin will see a better yield for reserves and set higher hurdle rates for investments.
Bitcoin financial innovation will emerge in 2021 and beyond. Ross envisioned a world where income annuities, salaries, and other financial instruments will be paid out in Bitcoin.
Bitcoin is no longer in its infancy. The cryptocurrency has operated with 12 years of safe operation of the network. At above $500 billion in market cap, the price of bitcoin could easily hit $50,000 a coin reaching $1 trillion in market cap by end of 2021.
Fiat reserves are more risky than Bitcoin. Crazy theories such as Modern Monetary Theory (MMT) and other schemes to devalue fiat currencies place global currencies as a risk not an asset.
Bitcoin Brings Clean Energy, Responsible Development, and Equitable Development Into The Future
While many environmental activists and climate crisis promoters often see bitcoin as an energy hog, Ross Stevens ended the fireside chat with a conversation on how the energy used to mine Bitcoin could be used to create equity and societal good. He and his firm estimated that the Bitcoins mined will consume about 10 million humans worth of energy. Stevens puts forth an argument that the the world has been challenged by not the ability to produce energy but with the ability to channel energy to the right geographical location.
In the case of Bitcoin, the use of energy to mine a Bitcoin is a definable math problem, not a geographical problem. He sees Bitcoin mining as the most efficient and profitable use of clean energy. Why? Energy usage to mine Bitcoin and the related monetization do not require geographical constraints. He imagines that countries with clean energy sources such as a hydro, geothermal, or wind can mine bitcoins anywhere and in hard to reach or under developed locations. The profits from Bitcoin mining could fund the infrastructure build outs for roads, clean water, connectivity, housing, and public health. Humanity can cluster around clean energy sources instead of waste those resources.
As Stevens put it, "We used to move power to people. Bitcoin moves people to the power." Unlike the useless and costly feckless climate accords, or green mandates for virtue signaling, he sees change when clean energy aligns with a clear and real profit motive. This development of abundant clean cheap energy coupled with manufacturing money from clean energy can fund a country's development and take emerging markets and developed countries into a more equitable and sustainable period of growth.
The Bottom Line: The Pandemic Has Accelerated The Rise Of Bitcoin And Every CEO Must Take Notice
Irresponsible over borrowing and printing of fiat currency has created a reflation trade crisis and perpetuated the equity crisis. In the past, central banks could print with some abandon by repatriating currencies into property, equity markets, tech startups, and direct foreign investment. Given how much fiat currency has been printed over the past 20 years, there is more money on the sidelines and more money in circulation than value or worth in the world. As Bitcoin moves from an asset that touches millions to a data driven digital network that impacts billions, fiat currencies and reserve currencies are at risk and face competition with efficient cryptocurrencies. New digital giants will emerge around Bitcoin and organizations that fail to build or partner in these networks will perish.
Learn more in my newest book Everybody Wants To Rule The World: Surviving and Thriving In A World of Digital Giants
Your POV
Will you put your reserves into bitcoin? Is this the future of reserved assets? What's your CFO thinking?
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 AI and Digital Business transformation efforts. Here’s how we can assist:
Developing your 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
Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.
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.
Copyright © 2001 – 2021 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network
Digital Giants
Event Report
@rwang0 R 'Ray' Wang Ray Wang Software Insider Insider Associates bitcoin Digital giants MIcroStrategy Michael Saylor Ross Stevens Cryptocurrency Enterprise Software value exchange cfo decentralized finance defi enterprise bitcoin blockchain @microstrategy 2021 @michael_saylor Constellation Research
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Call it the year of accelerated transformation. Call it the year of Covid. Call it the longest continuously burning dumpster fire the world has ever faced. The year 2020 will go down in history as a year of hard lessons and hard-fought best practices.
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