Alteryx and Qlik

Hi everyone

In my 2018 resolution to progress from a lurker to a contributor, I've taken a closer
 look at Alteryx to see if I can see what Saul sees.

Disclaimer: I started a position in AYX based on my extensive... deep anal... cos Saul 
said so.

I think (after watching interminable videos) I understand what AYX does, and it puts 
them fairly in the Business Intelligence camp as far as I can see. Alteryx provides the ability 
to ETLAR (Extract/Transform/Load/Analyse/Report) data to non-technical resources. Essentially, 
increasing the accuracy and timeliness of any analyses and visualisations.

Those analyses then funnel into Tableau, Excel or other reporting systems.

This is a crowded space, and I couldn't find any evidence that what they were doing
 was special. They seem well regarded in the space however, and users appear to like their
tool.

They seem to have competition at all levels, from the big dogs of MSFT, ORCL, SAP etc,
 small listed businesses eg: Datawatch to startups like Domo, and ClearStory Data 
(my personal favourite).

If you look at the Gartner BI comparison,
[http://data41.com/2017/02/20/gartner-magic-quadrant-business...](http://data41.com/2017/02/20/gartner-magic-quadrant-business-intelligence/)

One name that sticks out a bit is Qlik. I remember looking at QlikView several 
years ago as part of a business venture, and I wondered what happened to it.

Wikipedia: "June 2016, Qlik agreed to sell itself to private equity for about $3billion"

So I thought... I wonder how Qlik compares to Alteryx? I came up with a ground-breaking 
analysis, which was to compare some 10Q values.

AYX (Three Months Ended September 30 2017 and 2016)
Revenue       		34,155	22,462 
Cost of revenue	         5,425 	4,062
Gross profit         	28,730  18,400
Total opex		31,293	22,250
Current assets		200,319	100,438 
Deferred revenue	78,656	71,050
Current liabilities	96,841	85,577
Cash flow from op	6,440	-9,126
	
QLIK (early public offering)
Three Months Ended June 30 2011 and 2010
Revenue 		74,042 	51,130
Cost of Revenue	        8,600	5,745
Gross profit		65,442	45,385
Total opex		69,043	39,544	 	
Current assets		260,156	251,710
Deferred revenue 	54,941	50,024
Current liabilities	107,644	102,641
Cash flow from Op	12,157 	17,387 —> reported on 6 month period ending June 30	 

QLIK (last before taken private for $3.1billion)
Three Months Ended June 30 2016 and 2015
Revenue 		180,644	145,829
Cost of revenue	        26,190	22,194
Gross profit         	154,454	123,635
Total opex		155,700	133,549		 
Current assets		583,075	574,515
Deferred rev		170,539	172,121
Current liabilities	281,590	285,331
Cash flow from op 	48,579	49,607

From this brief analysis, in June 2016 QLIK was a $3 billion dollar company and 
taken private. The margins look similar to Alteryx, the growth rates are lower 
but still 45% yoy. Essentially, the companies look pretty similar unless I'm 
missing something.

The interesting thing to note (I think, given I can't tell a fish from a boot at 
this point) is the rise in QLIKs opexp, which just killed any profit they might 
have made. But early Qlik margins looks a lot like Alteryx margins. Maybe its 
just a low-margin market?

In summary, this seems to be a highly competitive space, where Alteryx are wrapping
 nice interfaces over fairly standard toolsets. Don't get me wrong, a nice interface
 can be a game changer (eg: Apple), but... everyone (of the videos I watched) seems
 to have a pretty nice interface.

Help! My "trying to learn to fish" seems to have surfaced a mouldy old boot... 
what am I missing? Any thoughts as to what else I should look at?

cheers
Greg
31 Likes

Greg,
You appear to be at least familiar with BI tools, ETL tools, etc. so maybe your information is more current than mine. I was an Enterprise Architect for a Fortune 50 company and this stuff was in my bailiwick. But, I retired in 2010 and have made zero effort to KUTD on any of this subject.

I reviewed all the same videos you watched (I assume - the ones presented on the Alteryx website). Given the state of BI tools when I retired, Alteryx indeed offered more in depth analysis tools and a far friendlier user interface than anything I was familiar with. If you know these tools, you also know that they live and die based on the user interface. If the tool is too difficult to use by a non-techie IT person, they will suffer in the market. There will always be a few super-user types that aren’t stymied by a difficult UI, but if the average user is constantly calling IT for support, the tools won’t get adopted. Alteryx has packaged just about every question a data scientist might ask and made those queries exceedingly accessible.

I bailed on my Alterys position after the reported data leak, but Saul managed to convince me that I had over-reacted. I’ve bought back in, but still hold a fairly small position. That may change, but I would have to sell something to buy more and right now I don’t have anything I want to sell.

4 Likes

Thanks brittlerock, yes, pretty familiar with them, as well as SQL/R/data analysis as a CTO of a small startup etc. Congratulations on retiring, and I completely understand not KUTD with that area. Technology can just be draining after a while…

I watched the videos of a bunch of the competitors I mentioned that were in the Gartner report, particularly those who were in what I felt was Alteryx’s space, ETLA. And they all seem to have very familiar interfaces (ie, they look exactly like Alteryx). Alteryx does seem to be ahead on analytics, but they’re wrapping standing functions, which would take any competitor a few [weeks/months] to reproduce. And as one of the competitors mentioned, those functions are nice to haves.

I understand that a company is much more than technology+interface. I just can’t see where I should be looking to see what Saul sees. Particularly if you compare it to something like Qlik, which it appears to show significant similarities, and are in the same space. I’d love to see Qliks accounts now!

Part of my issue may be about timing, coming from the LTBH doctrine. From my relatively brief time here, it seems Saul is much more active in selling than (for example) StockAdvisor.

Could I imagine that Alteryx doubles from here? Definitely, hitting Qliks $3b. A triple or more, even over an extended period of time? Not so much. But a double would still be awesome :slight_smile:

cheers
Greg

3 Likes

Greg,
Thanks for the prompt reply. When I was still working I sat on a panel of architects that had the job of reviewing vendor offerings that made decisions (based on technical merits, finance guys also had a call on this re/ vendor financial stability) on corporate standards. Standardizing a particular vendor’s offerings was a big money call, not just for the vendor, but also for my employer. Once we declared a standard, a lot of internal IT support for the vendor’s products was put in place.

The whole reason for the existence of the IT standards board was to reduce the overall costs to the company. Experience had taught management that while it was “nice” to allow managers a certain amount of autonomy regarding IT tools, once the house was filled up with every dog in town, training, support and maintenance costs were untenable. Once we standardized a product and support services were established, there was a lot of reluctance to abandon that product in lieu of another one, irrespective of functionality, performance, etc. It happened upon occasion, sometimes with deeply embedded products (i.e., I was one of the managers involved with a migration from Big Blue to distributed UNIX), it just didn’t happen often.

Standardization did not automatically preclude non-standard products in a domain. But, it did preclude any internal support (unless the product interfered with IT operations in which case it was promptly isolated and removed).

What I’m getting at is that being first mover in a space makes a difference. Most of the BI tools I’m familiar with (out of date, I admit) were basically a slick user interface overlaying Boolean logic routines at root. SAS has been around forever, but you pretty much need to be a mathematician to use it effectively.

But, in some ways I suppose Alteryx is no different, just a lot easier to use than SAS which may not be such a good thing. It’s so easy to reach bad decisions based on a shallow understanding of what is represented by a statistical analysis. If anyone thinks it’s all cut and dried math, they couldn’t be more wrong. The most difficult specs I ever wrote had to do with the statistical analysis that was applied to the receiving inspection process. I spent nearly a year getting three statisticians from different divisions to agree on a single analytical outcome. Even after that, the company hired outside consultants to review the process after it was implemented. It passed with flying colors to my great relief.

I don’t want to speak for Saul, but he has been very candid that he doesn’t have much understanding of the Alteryx tool set. What he understands is the reported growth of the company which is impressive to say the least. How that plays out over time with respect to the stock price remains to be seen. Saul is very confident. He has taken a “full” position in short order. I think that’s around 8%. I am not quite so sure. I’ve got a 2.5% position.

12 Likes

I think our timezones overlap a bit!

You’ve definitely got more high-level experience than I have, so thanks for sharing that. The war stories definitely add some good colour.

From Sauls summary post: “Alteryx is attempting to build a new category - a platform that combines both data integration and high end analytics, targeting the emerging category of citizen data analysts.”

I guess I don’t see the building of a new category. As far as I can see, they’re ELT with some basic analytics hooked in. And as you say, the devil is in the analytics detail.

I do like the Alteryx Promote product (https://www.alteryx.com/products/alteryx-promote) which is (I believe) intended to facilitate using your Alteryx analyses in production systems, and the Alteryx Connect, which is all about enterprise-wise data and analyses management, which I imagine would be a god-send in large enterprises.

I do recall Gregs Rule #1: someone who states they’re knowledgeable about a given market should be completely ignored if they ever opine about said market. Particularly if they’re me!

I’m just trying to see what Saul is seeing, so maybe one day I can actually make some useful suggestions here. And from the data I’ve looked at, 2017 Alteryx looks a lot like 2011 Qlik.

I’ve taken a 3% position because I trust Sauls insights more than mine!

cheers
Greg

1 Like

And from the data I’ve looked at, 2017 Alteryx looks a lot like 2011 Qlik.

Greg,

Is the 2011 Qlik look a good thing or bad?

Rizz