SaaS Boom Presages a SaaS Food Fight
Follow James on Twitter @jwangARK
As Software-as-a-Service (SaaS) companies reach record valuations, this Seeking Alpha paywall piece by Akram’s Razor is quite illuminating.
According to Razor, two trends have paved the way for SaaS growth during the past decade. First is the growth and ubiquity of the public cloud. Historically, software companies had to procure expensive servers and hardware before they could develop. Today, however, software engineers are creating SaaS companies with little more than laptops and Amazon Web Service credits. Because the friction and cost associated with software development has collapsed, SaaS startups are proliferating and serving every industry niche. The second trend paving the way for SaaS companies has been the unbundling of software from monolithic systems and the conversion to micro-services stitched together by lightweight APIs facilitating agile and faster software development and more scalability. Independent modules for payments, HR, and databases also have created opportunities for newcomers like Stripe, Workday, and MongoDB.
While these two trends have created many startups, the market seems to be getting saturated. Unlike the greenfield opportunities available in their early days, SaaS companies today are beginning to compete against one another. Adobe and Salesforce are dueling it out in marketing cloud platforms, Atlassian and PagerDuty in alert management, and Slack and Microsoft in team communications.
Today’s SaaS valuations suggest years of unabated growth. The competition now suggests more caution ahead.
Trump Talks Bitcoin
Follow Yassine on Twitter @yassineARK
This week marked the first time a US President has addressed the topic of bitcoin. On Twitter late Thursday night, President Trump shared his views on cryptoassets generally and bitcoin specifically. In a thread, Trump stated that he is "not a fan of bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air," adding that "unregulated cryptoassets can facilitate unlawful behavior, including drug trade and other illegal activity." In the second part of the thread, Trump addressed Facebook’s Libra, stating that it “will have little standing or dependability” and would require “a banking charter…subject to banking regulations.” Trump’s comments on Libra are another indication that Facebook will face regulatory scrutiny as the centralized issuer of a “digital currency”.
Surprising to some, Trump’s pronouncements have generated excitement in the Bitcoin community, primarily because it seems “all publicity is good publicity.” Many of its advocates consider Bitcoin an antifragile system: under stress and noise, these systems thrive and become more robust. In the last ten years, Bitcoin’s antifragility powered it through the Silk Road shutdown, exchange hacks, and country bans as its price, while volatile, has scaled exponentially.
Trump’s comments probably will pique more interest in bitcoin, educating more people on its value proposition as a decentralized and independent monetary system. Squawk Box’s cogent response to Trump’s comments is a good example of the evolution of mainstream thinking.
Since Trump’s tweet, bitcoin’s price has appreciated more than 5%.