From setting out company ambitions to multibillion-dollar investments, here are some extracts from our most popular news stories over the last seven days.
New Multibillion-Dollar Investment May Spark Change at Salesforce
Elliott Management Corp. has invested billions of dollars into Salesforce.
After a slew of bad news at the back end of 2022, the move shows that investors still see a significant opportunity for continued growth.
The markets reacted well to the announcement, despite releasing few additional details regarding the move, with Salesforce stock up 5.71 percent.
Yet, some worry that the investment will limit the autonomy of those at the top of the business.
Indeed, Elliott Management has earned a reputation for demanding change and calling out major businesses for various perceived shortfalls.
SSE can perhaps attest to this, with Elliott Management publicly attacking the business – which it has a significant stake in – over its green energy plans.
A statement from Jesse Cohn, Managing Partner at Elliott Management, suggested that the investor may also shake up the status quo at Salesforce – all be it “constructively”. He said:
We look forward to working constructively with Salesforce to realize the value befitting a company of its stature.
Some interpret this as increasing profit margins by cost-cutting, expecting Elliot Management to turn up the heat on the board.
SAP Wants to Sell Its Stake In Qualtrics
SAP is exploring the opportunity to sell its 71 percent stake in Qualtrics.
After initially acquiring Qualtrics for $8BN in 2018, SAP spun the software provider off into an IPO little more than two years later.
While Qualtrics performed well at that time, as a separate solution, the combined SAP-Qualtrics offering seemingly failed to resonate with most customers.
The initial idea was to take Qualtrics’ experience data (X data) and combine it with SAP’s operational data (O data) to give businesses a holistic view of how customers and employees feel about them.
In 2018, former SAP CEO Bill McDermott shared this idea with CNBC: “We – fundamentally – wanted a transformational deal, one that would reshape the entire industry. And here we are.”
Yet, this vision never quite came to be. And, when Christian Klein took the CEO hot seat in April 2020, his reported mission was to refocus SAP back to its core business.
Years later, this mission has not changed – as the sale of SAP Litmos in August also suggests.
Now, it seems SAP is doubling down on its mission, lessening the focus on its “side projects” and bidding a fond farewell to Qualtrics once and for all.
“This potential transaction could unlock significant value for both companies and their shareholders,” noted SAP in its quarterly statement.
For SAP, these benefits include an increased focus on its “core cloud growth and profitability.” Meanwhile, Qualtrics will aim to “extend its leadership in the XM category that it pioneered.”
The Latest On the Layoffs at Microsoft, Google, and Amazon
Microsoft joined its CX rivals Google and Amazon in laying off thousands of employees.
Unfortunately, the trend extends further into the CX space, also impacting the likes of Salesforce, Oracle, Cisco, and many others.
Indeed, after only three weeks of 2023, more than 150 tech companies laid off over 55,000 employees – as per Layoffs.fyi.
The most prominent cause seems to be that these vendors overinvested in their growth as new opportunities presented themselves during the pandemic.
However, the war in Ukraine, the resulting energy crisis, and economic uncertainty threw an almighty spanner in the works.
Nevertheless, stalwart vendors also seem to be seizing the chance to restructure their businesses.
After all, despite the tricky economy, enterprise IT spending remains “strong” and “recession-proof”, according to John-David Lovelock, VP Analyst at Gartner.
His research also suggests that enterprise spending on software and IT services will grow by 9.3 and 5.5 percent, respectively, in 2023.
So, perhaps businesses are not only making layoffs out of economic necessity. Instead, a change of strategy may be afoot for many.
As such, let’s reconsider the layoffs at Microsoft, Google, and AWS, questioning: how might the gameplan change in 2023 and beyond?
ServiceNow CEO: Our Ambition Is to Be the Defining Enterprise Software Company of the 21st Century
Bill McDermott, Chairman and CEO at ServiceNow, has set out the ambition to turn the organization into the “defining enterprise software company of the 21st century”.
McDermott made the statement during the company’s quarter four earnings call for the fiscal year 2022 on Wednesday, January 25.
ServiceNow revealed during the call that it had achieved total revenue of $1,940 million during Q4, which equated to 20 percent year-over-year growth.
Subscription revenues were also up during Q4 for FY 2022 and represented a 22 percent year-over-year growth.
McDermott commented on the successful quarter: “ServiceNow continues to perform as a beyond-expectations company.
“Our Q4 surge in new business shows that the secular tailwinds of digitization aren’t going anywhere.
We are driving net‑new innovation, fast growth, and operating leverage. The world works with ServiceNow as the end‑to‑end platform for digital transformation.
The Q4 results mean the company’s contract revenue that will be recognized as revenue in the next 12 months was $6.94bn and represented a 22 percent year-over-year growth.
ServiceNow also revealed that the company has over 1,600 customers with an annual contract value of more than $1 million.
