Alteryx is not SaaS

Investment Analysis Clubs Saul’s Investing Discussions
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I got a question off-board about why am I griping that Alteryx is not a SaaS, passing along a SeekingAlpha article comparing SaaS companies that included AYX. Thanks for the question, and I figured it’d be a good post so am answering publicly.

Just because financial articles and blogs keep calling AYX a SaaS company and putting it their hyper-growth comparisons or fancy Rule of 40 charts doesn’t make it so. They are wrong.

Alteryx does have the so important recurring revenue needed to obtain hypergrowth – but it is NOT SaaS.

First a few terms…

Software-as-a-Service (SaaS) = a software application being made available ON THE CLOUD, so that you don’t have to install it locally on your computer then manage and upgrade it from there. For end-user applications, this means the software is entirely accessed via a web or mobile application, having most/all data stored in the cloud. For server-side applications like databases, SaaS can mean managed hosting of that application (see MDB Atlas).

Single-tenancy = traditional method of installing software into your own system, where your company is the only “tenant” (customer of the application) accessing it. Every instance is its own install and is their “own island” (isolated from others). Hosted applications can be single-tenant, but requires separate infrastructure be utilized per customer.

Multi-tenancy = SaaS term that means you can support multiple customers on the same hosted instance of the application, each user being secured to see only their own data. Vast majority of SaaS applications are architected to be multi-tenant.

Data bleed = when security of a multi-tenant application is not implemented correctly, and a user can accidentally see another user’s data or data becomes co-mingled. This is a big no-no. (Not really pertinent to today’s discussion, but I always loved the term.)

Tenant isolation = intentionally keeping application as single-tenant for security purposes. In cloud hosting, it means renting your own set of infrastructure, instead of using shared instances.

Vertical scaling = buying a more powerful server to make it more responsive and performant. This is typically the only option for server-side installed software that isn’t cluster-based.

Horizontal scaling = being able to scale up more instances to make a cluster-based server-side application more responsive and performant. (I’ve covered this before in my recent ESTC and MDB coverage.)

…BACK TO AYX

So let’s be clear - Alteryx is not a SaaS company. Every product is a software you download from them then install on your system. However, unlike the days of old with boxed software that you bought at the store, access to these softwares is sold on a annual subscription basis - so it IS recurring revenue. But they are not hosting anything for you in the cloud, nor providing their products “as-a-service”.

  • Alteryx Designer runs on your laptop or desktop computer, as long as its Windows 10+.
  • Alteryx Server or Connect runs on your on-premise server or cloud-based VM, as long as its Windows Server 2008+.
  • Alteryx Promote runs on your on-premise server or cloud-based VM, as long as it’s a CentOS7 cluster with 3+ nodes.

So none of their software exists solely in the cloud. For Alteryx, this makes data management easy. They don’t need to worry about managing a customer’s datasets, as a user just feeds in information into their computer – whether from Excel or CSV files on their local file system, pointing to files in the cloud (AWS S3), or hooks into their on-premise or cloud-hosted databases and other data sources.

This disappoints me, as Alteryx could be making incremental moves in a SaaS direction, yet they are not. Yes, you can install it into a cloud-based server (e.g. a Windows instance running on Azure or AWS), but it remains a server software you install and manage and upgrade on your own.

Regardless of all my gripes, Alteryx is a raging success, and I own a large slug of it (13%). But I am disappointed in this decision to remain out of SaaS.

  • They are limiting the scale of what a single server can handle, in terms of data load. (Vertical scaling can only go so far. Cloud SaaS architecture would allow for horizontal scaling.)
  • This puts the onus of the compute and memory costs (the major factors in analytics work) on the customer, to purchase in advance.
  • This doesn’t let the customer scale up as needed, either.
  • I think this leaves them more open to being disrupted by SaaS services that could provide a similar ETL and analytics platform that scales.
  • It may also may be limiting their potential market by being so Windows-focused with their applications - though this is likely not a bad decision with their market (likely ~80% of enterprise companies are on Windows), but many companies are Mac-focused (design shops, software developers), and more and more companies are mobile-focused or tablet driven (restaurants, retail).

Let’s think of Alteryx Server as something akin to the traditional MongoDB database - it is a software you need to install on your own on-premise or cloud-based server or VM.

But then, why isn’t Alteryx offering a managed hosting service akin to Atlas? “We host Alteryx Server/Connect/Promote for you - just subscribe!” This would be an incredibly easy move for them to make (technically) if they kept it as single-tenant managed instances, and likely removes a big source of friction in getting users hooked into those products.

The vast majority of Alteryx products are WINDOWS-based. Not every company utilizes Windows, so they are limiting their market potential somewhat with this choice. Sure, most enterprises are likely Windows environments, but why limit it to just one OS? Not so much for the few Mac users like me, but today’s companies are adopting tablets in their workforce more and more. You need a Windows laptop or desktop to use Alteryx Designer.

As for the server-side products, you can deploy these into the cloud (AWS, Azure, GCP) onto a Windows instance. Promote is the only non-Windows software Alteryx offers. It runs on a 3+ node CentOS7 Linux cluster.

Moves Alteryx could make…

EASY:
Offer a “vendor-neutral” managed hosting offering on the 3 major cloud platforms. Host Alteryx Server, Connect and Promote instances as single-tenant instances per customer. This basically reduces customer friction in using these products as they no longer need to buy the hardware up front, nor install and maintain the software themselves. (This isn’t how most SaaS companies work though – single-tenancy is expensive as each requires their own separate system to host it. But it would be a great first step.)

HARDER:
From there, take steps to allow Alteryx Server, Connect and Promote softwares to be a fully multi-tenant and cluster-based (and hence, horizontally scalable). They could then host the applications on a “shared” instance as a SaaS service. They could continue to have a higher price tier for larger or security-conscious customers to allow them to have tenant isolation. (This gets them to multi-tenancy, which is how all other SaaS companies typically are architected.)

HARDEST:
Regardless of the those server-side decisions, Designer can only be run on Windows laptops/desktops only. Instead of expanding the operating systems supported beyond Windows, migrate Designer to work as a browser-based SaaS application. This would make it more difficult to work with local files (browsers are mostly walled off from file system for security), so there would have to be a new module developed for uploading and managing your files and database connections, as datasets within the SaaS service.

The implications here are that it makes it more difficult for Alteryx platform to get at on-premise files and databases. But we know from Okta and other SaaS companies that enterprises are heavily moving into the cloud, and into hybrid or multi-cloud approaches. Alteryx is ignoring these trends.

Sure, as companies move more to cloud-only or hybrid environments, they can continue working with AYX right now, but it requires they create a Windows instance in the cloud and install & manage the AYX software on it. I feel that Alteryx platform should just be there, at the ready, as a SaaS service available in the cloud vendor of the customer’s choice.

All that said, they may have finally made a move towards SaaS with their acquisition of ClearStory and their Spark-based tools. However, I cannot get much information on the company’s products as their website now just forwards to Alteryx’s site. If it is for on-premise integration with Spark, this merely passes the buck back to the customer to maintain more infrastructure (a Hadoop cluster running Spark). But if they had a SaaS offering, hopefully this develops into an AYX product where you pass in your final models and data, and they run the compute in the cloud.

So I await Alteryx’s moves from here with bated breath. This could finally be the sign I have been looking for – but it doesn’t cover their existing product line, only Spark capabilities to run larger data sets and models. But leveraging Spark for analytics compute tasks DOES get them past the limits of what vertical scaling will allow one computer to do.

So this is what I mean by my griping about lack of SaaS, and in keeping a close eye out on AYX – on the competition, and on seeing where AYX continues to take their platform from here.

-muji
long AYX

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Actually, Muji, SaaS is a licensing model … it doesn’t really have anything to do with the cloud except a centralized cloud-based installation is the way in which it is most commonly delivered. But, there is nothing to say that a company can’t use a SaaS licensing model for on prem software. The distinction is whether one pays a big chunk up front and possibly on going maintenance fees or does one pay a fixed per user rental every year. So, sounds to me like it is perfectly valid to call AYX a SaaS company.

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tamhas, I disagree. I think Muji is correct. The “Service” part of SaaS, in my view, requires cloud hosting. AYX is subscription revenue, for sure. But it’s not a service. Period. Its just like the on-premise legacy software of old, but with a different payment plan.

SaaS is more than just a licensing model. The question I now have is, which is more important, the recurring revenue (likely), or the cloud hosting (probably not as important). The monkey wrench would be if someone creates an AYX competitor that IS cloud hosted.

With that I agree that AYX should do what Muji suggests.

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You are all correct. Just depends on context.

Anything can be “aaS” including DaaS which is desktop as a service.

Obviously you wont get the PCs from the cloud. But it is a different way of procurement.

For software or SaaS it generally means cloud-delivered or centrally-delivered.

AYX can work w AWS and cloud, but is not true SaaS.

However, their ceo has brought this up repeatedly on ER CCs and stated the demand for cloud-based was not there from their clients yet.

You tend to do data analytics where the data resides. Cloud storage for data analytics (hot vs cold storage) is not cheap. For security and cost reasons, large enterprises will continue to have onprem gear.

Elastic, Mongo, and others all cater to both cloud and onprem. This is why Mongo Atlas wont be replacing all onprem licensing anytime soon.

I also think AYX needs a smoother cloud story, but it hasnt hurt them (yet).

My 2 cents. Worth about a penny.

Dreamer

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tamhas, I disagree. I think Muji is correct. The “Service” part of SaaS, in my view, requires cloud hosting. AYX is subscription revenue, for sure. But it’s not a service. Period. Its just like the on-premise legacy software of old, but with a different payment plan.

Being able to run a SaaS product in house is a feature but the main attraction of SaaS is not having to have servers and their priesthood in house. This is very much inline with the modern concept of doing ‘core’ in-house and farming out what others can do better and cheaper, a.k.a. ‘context.’ The principal reason I have heard for doing SaaS in-house is for security reasons.

Denny Schlesinger

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Muji, have you considered sending your excellent suggestions to Alteryx Investor Relations, or even to the CEO or CFO?
Saul

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Does that give them more security? Arguably they still have to defend their entreprise.

tj

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I found this little note in my files from the cc of Q2 2018:

Move to cloud: at the moment data is on prem or hybrid - in the next decade move to cloud could be a challenge.

I have to admit that I didn’t quite get all the technical details you described, muji. But couldn’t it just be that companies are not yet comfortable to move all sensitive data to the cloud so there is simply no demand yet? Of course, AYX could make the first step and create a compelling and secure product to ramp up demand (thinking of the famous Jobs quote about customers don’t know what they need until they see it). Enjoyed your post a lot! Thanks for sharing!

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Actually, tamhas, Saas is a delivery model. The customer does not need to acquire or maintain any application-specific technology and the supplier can update the software centrally for everyone - or whoever they wish - as they wish.

Licenses can be classified as subscription or perpetual (along with some other variations, but these 2 will do for now). Perpetual typically involve an initial lump payment, along with periodic payments for access to updates and maintenance. These periodic payments can be more or less optional depending on the product.

SaaS and desktop software can use either of those licensing models, although subscription is much more common for SaaS.

Even if a product is typically supplied as SaaS, if a customer really wanted, they could investigate paying for an on-prem installation - although most providers would probably make it cost-prohibitive. As someone has said, the motivation for this might well be security concerns, although these days there are hybrids that can address that to the mutual satisfaction of suppliers and customers.

Now, as it relates to AYX…note that their product needs to interface with a load of different data sources within the enterprise. Many organizations are going to be squirrelly about allowing access to some or all of those to an outside service, and so this is one instance where the nature of the product is such that it absolutely makes sense for it to be an Enterprise On-Prem installation. That doesn’t prevent AYX from developing a ‘lightweight’, hosted version of the application…but for the heavy hitters with multiple data sources (where a lot of the value lies, I suspect) this is not going to be as attractive.

I have experience with different companies selling either SaaS or desktop software products: whilst the SaaS operations are much more straightforward, the sensitive nature of the desktop product is such that many customers would never consider purchasing it if they could not retain complete control of the inputs and outputs.

Bottom line is that SaaS has much going for it, but there are some applications where it is not stupid to offer something else.

Cheers

Cham

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The point of SaaS is the licensing model. One can have cloud implementation with purchased software so merely having something in the cloud is not defining of the subscription model. What is defining of SaaS is the “rental” model. No big up front purchase price. Probably no on-going [optional] maintenance agreement because that is bundled in the subscription.

Note, I have been involved in SaaS peripherally since the mid-90s. Back then, many vendors, who were typically just starting with a move to a SaaS model, would either provide an internet or an on-prem implementation. The on-prem was mostly used by companies that were strongly security conscious and afraid to have their data “out there somewhere”. Achievable line speeds were also considerably slower back then and the “pipes” were smaller, making it harder to support large numbers of users. These days, those concerns and limits have significantly improved in favor of cloud implementations. Moreover, the cloud implementation allows the provider economies of scale in supporting multiple customers on a single machine and the like using partitioned databases. So, on-prem implementations are probably uncommon these days, but there is nothing to stop someone from using a subscription licensing model with an on-prem implementation. The important part is the licensing model.

This is akin to calling things SQL databases when the correct term is relational. SQL is just a common query language which is not the only way to retrieve data from a relational database. The important thing, e.g., in contrasting to a document database, is that the storage model is relational, not what technology one uses to retrieve data from it.

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the main attraction of SaaS is not having to have servers and their priesthood in house.

No, Denny, that is the main attraction of a cloud implementation. The main attraction of the SaaS licensing model is not having a huge up front purchasing cost, but rather having a modest yearly user count-based “rental” cost.

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SaaS is a licensing model …

Not true. You are confusing perpetual license vs term license as SaaS. SaaS is far more than term license.

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Look at the name. Everything *aaS is “as a service”, i.e., you buy as much of it as you need for as long as you need it with no up front payment for a right to use.

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Muji,
Very informative post. The article in link below discusses several related issues;

https://www.zdnet.com/article/where-is-alteryx-heading/

On AYX’s lack of cloud hosted option

And the 16-ton gorilla sitting in the corner is the issue of cloud transformation: Alteryx has been built for Windows desktops and is just getting the wheels rolling to add a Linux server and browser-based Ui. But then again, on the UI front, Tableau is in the same situation. And this is before we even start talking containerization that could ready these tools for cloud-based PaaS offerings. We’re getting ahead of ourselves here, but emergence of cloud-based AutoML services will be the tail to wag this dog.

The video in the article also talks about data moving into the cloud. The video talks of more acquisitions like Salesforce/Tableau and Google/Onlooker.

The article also says that the much discussed assisted model works only on designer and not on server which limits scaling.

For instance, it’s side-by-side testing capability is a pales compared to what specialized data science tool providers such as Data Robot already support. So, beyond adding support of more models, it would make sense to get the new assisted modeling feature running up on the server where there would be more scale in the ability to test more models at once across larger data sets.

There are positives though as AYX is only company doing data prep, data science and visualization. Many companies like datarobot and even Tableau specialize. Of course, Salesforce and Google can try to do that with their new acquisitions.

On clear story
With ink still drying on the acquisition, Alteryx will leverage ClearStory in a couple ways. First, it will apply a much-needed infusion of machine learning enhancement to its data rep capabilities, especially in data matching and blending. Secondly, it will add a second Spark-based execution engine to the mix for handling larger data manipulation runs. As scaling processing and data volume with in-memory capability, that could only enhance Alteryx’s capability to crunch ML models. Going forward, Alteryx plans to expand the palette with more such execution engines.

As long as the numbers look good, I am not planning on reducing my large AYX holding of 16.5%. But I have a question for you. Why don’t you think AYX takes the “Easy” approach you suggest? Like Saul says you could pose your question to company’s IR department. They are normally very forthcoming.

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We’re all arguing over semantics, which is irrelevant and controversial. Adobe Creative Cloud is regarded as SaaS by some, and not by others. You subscribe to a centrally hosted cloud of applications and software, which you need to install locally to use.

Muji’s gripe is not being able to use AYX on the cloud to benefit from horizontal scaling, and to also allow smaller enterprises, who may not have sufficient on-prem infrastructure to currently use AYX well, to now become customers. It would open up the TAM for AYX, definitely.

Dreamer is on point here. The CEO recognises this and has repeatedly said the market is not there. I get the point, create it and they will come. But for the time being they’re putting all their efforts and S&M dollars into growing into the low hanging fruit of the large enterprises. These companies will not want to use a hosted service, because it is expensive. Analysing all the big data on a hosted service that charges by the minute when you have idle CPU power on-prem? No thanks.

But the CEO is aware. I’m not sure how much R&D they’re currently spending on it but yes, you would hope they are casually developing something in the background, so they’re ready to release if a disruptor comes along. Or just buy the disruptor.

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But I am disappointed in this decision to remain out of SaaS.

- They are limiting the scale of what a single server can handle, in terms of data load. (Vertical scaling can only go so far. Cloud SaaS architecture would allow for horizontal scaling.)
- This puts the onus of the compute and memory costs (the major factors in analytics work) on the customer, to purchase in advance.
- This doesn’t let the customer scale up as needed, either.
- I think this leaves them more open to being disrupted by SaaS services that could provide a similar ETL and analytics platform that scales.
- It may also may be limiting their potential market by being so Windows-focused with their applications - though this is likely not a bad decision with their market (likely ~80% of enterprise companies are on Windows), but many companies are Mac-focused (design shops, software developers), and more and more companies are mobile-focused or tablet driven (restaurants, retail).

Muji:

Any thoughts on who/what would disrupt them?

AYX has the highest gross margins of any stock followed here at 90%. It also has an enviable revenue growth rate and guidance to 50% YoY.

Seems MDB has experienced pressure on its margins by Atlas…why wouldn’t that happen with AYX?

As you know at the investors event, they set longterm margin targets at 90-92%!

Tinker and I have long had discussions about who their potential customers are…they call them “citizen data scientists”…would their target customers want their data on prem or on cloud?

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Denny,
You are spot on. Security was the prime deciding factor regarding cloud migration in the Fortune 50 company I worked at. There was distrust about placing the “crown jewels” of the company on the cloud.

It might be argued that protecting the crown jewels on premises was just as risk prone as moving them to the cloud, but it was impossible to clearly demonstrate that cloud was less likely to be breached than on-prem, therefore the emotional argument of keeping them safe in our own “vault” was the option that won out.

We’re about 10 years out from when I was privy to these decisions. Things might have changed in the interim, but my guess is that Alteryx knows their customer requirements better than I do. I take them at their word that their customers have not made this an issue. Have they lost sales due to forcing their customers to host AYX apps on corporate maintained infrastructure? I don’t know, but I would think any customer that has enough data to want to use the AYX toolset most likely already has a substantial investment in one or more proprietary data centers. Buying AYX tools is unlikely to force a company to acquire a bunch of h/w, networking and, as Denny put it, the associated priesthood. They’ve already got what they need. Is exclusively Windows a problem? Again, I don’t know for dead certain, but in all my time in IT ever since desktop brains were a thing, I never met anyone who worked at a shop that didn’t have a major investment in PC/Windows/NT. Are there shops with exclusive Apple desktops? Probably. Would buying a few PC/Windows be the thing holding them back from making an AYX purchase? Unlikely, improbable, dubious, I don’t think so.

OTOH, if I were a C level exec at Alteryx, I might be concerned that demand for cloud based product might arise quickly. I wouldn’t want to be in the position of losing sales due to this issue. Alteryx (like most companies) does not share specifics about R&D projects, but I would not be surprised to learn that work along the lines that Muji suggested is already underway, maybe more along the lines of feasibility and design as opposed to cutting code, but a well designed solution is more than half done.

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License is right to use, service is much more than right to use, it includes the right to use, and a whole lot of service wrapped on top of that. I guess you probably gets it…

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My wish came true, I spurred discussion. Some responses…

Tamhas:
Actually, Muji, SaaS is a licensing model … it doesn’t really have anything to do with the cloud except a centralized cloud-based installation is the way in which it is most commonly delivered. But, there is nothing to say that a company can’t use a SaaS licensing model for on prem software. And then The point of SaaS is the licensing model. … What is defining of SaaS is the “rental” model. No big up front purchase price.

Repetition isn’t going to win this uphill battle for you, Tamhas. I am afraid you are omitting a huge part of the picture in your overly narrow definition of what SaaS means, contrary to the commonly accepted definition by the tech industry. Perhaps your past history near the industry is biasing your view based on some prior definition, but the term “SaaS” is commonly understood to refer to BOTH the delivery model (the fact it is hosted elsewhere, so that you as the customer aren’t tasked with installing and maintaining that software on your hardware) AS WELL AS the licensing model (subscription), with most definitions placing the overall emphasis on the delivery side. Your arguments are based on about 1/3 of what the agreed-upon meaning is and you are trying to fence it off there.

Wikipedia definition: SaaS is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted … SaaS is typically accessed by users using a thin client, e.g. via a web browser.

Google’s definition: SaaS is a method of software delivery and licensing in which software is accessed online via a subscription, rather than bought and installed on individual computers.

Techopedia definition: SaaS is a model for the distribution of software where customers access software over the Internet. In SaaS, a service provider hosts the application at its data center and a customer accesses it via a standard web browser. … Updates are applied automatically without customer intervention … The service is purchased on a subscription basis … No hardware is required to be installed by the customer

As clarification on my writeup, I said “ON THE CLOUD” in my SaaS definition, but I didn’t mean it was specifically on a cloud vendor (eg AWS), I meant it the application was hosted on a computer that was NOT the customers, as the next sentence reinforced “so that you don’t have to install it locally on your computer then manage and upgrade it from there”.

Dreamer:
I also think AYX needs a smoother cloud story, but it hasnt hurt them (yet).
I completely concur. I bring all this up as I don’t want the disruptor to get disrupted.

Diablito:
But couldn’t it just be that companies are not yet comfortable to move all sensitive data to the cloud so there is simply no demand yet?
Those days are over. Companies are getting more and more comfortable, to the point their entire technology stack is in the cloud (see Netflix, hosting all its stack on a division of a business that contains another division directly competing with them). Okta and ZS both focus on showing hybrid is a huge new trend.

Texmex:
Why don’t you think AYX takes the “Easy” approach you suggest?
Unknown, but as Dreamer pointed out the CEO has addressed the topic at times. I’m just disappointed in the answer. Perhaps because they don’t want to start down this road of providing a hosting service, as they then have to continue down that road as customers will then want more. If SaaS is not on their road map (steps 2 and 3), then no point in adding the complexity of hosting separate containers (step 1) [extra revenue but lower margins].

BenDubya:
We’re all arguing over semantics, which is irrelevant and controversial.
Like in medicine, in the tech industry, commonly defined terminology matters. Misunderstandings happen all the time to me as a developer in describing technology to stake-holders, so I frequently find myself in this teaching role that I take in these posts. (Better to head it off misunderstandings quickly before it turns into wasted effort of time and money.) Mislabeling SaaS is a very common misunderstanding (see all those SeekingAlpha articles calling AYX a SaaS, and Tamhas’s arguments above), but it deserves correction.

Adobe Creative Cloud is regarded as SaaS by some, and not by others. You subscribe to a centrally hosted cloud of applications and software, which you need to install locally to use.
Sure, there are plenty of gray areas. Adobe Creative Cloud has installed self-updating native apps, as you cannot do Photoshop and Illustrator in a browser. Zscaler and CrowdStrike have installed agents as components of their SaaS platforms. Alteryx is not a gray area - it has no cloud-side, it is a traditional software app that you download and install, and it talks only to other Alteryx products that you also download and install. You must maintain and update it after installation.

Speaking of gray areas, in all this talk of SaaS, I forgot to mention one new form of delivery. Of all the companies we follow, Elastic emerged with a new angle - allowing customers to use Elastic’s SaaS hosting service but entirely on-premise (called Elastic Cloud Enterprise). I don’t know what to call this type of service yet … hybrid SaaS?

But for the time being they’re putting all their efforts and S&M dollars into growing into the low hanging fruit of the large enterprises.
Absolutely. And boy is that low hanging fruit bringing a lot of success. I just see a path forward that they could take to assure their success continues longer.

These companies will not want to use a hosted service, because it is expensive. Analyzing all the big data on a hosted service that charges by the minute when you have idle CPU power on-prem? No thanks.
Splunk’s entire business model completely counters that argument. But I agree that enterprises likely have a lot of unused capacity. But with that comes an extra overhead of costs (power, cooling, staff).

Duma:
Any thoughts on who/what would disrupt them?
The big players already in cloud-provided data services - AWS, Google, Microsoft - are all making a lot of moves towards prep, analysis and visualization of data. I still think being Windows-based makes AYX a prime Microsoft acquisition target; they are in a partnership already. Salesforce just bought Tableau so it’s entering this market. Snowflake is a rising data warehouse and analytics SaaS (likely to IPO at some point). But not seeing any “all-in-one” (data prep, visualization, analytics) SaaS solutions yet.

Seems MDB has experienced pressure on its margins by Atlas…why wouldn’t that happen with AYX?
It would. Adding a new mix of lower margin revenue is still more revenue and an increase in SAM. But to me, the more important parts of my arguments were increasing TAM, adding in horizontal scaling for bigger analytics compute, and reducing customer friction.

would their target customers want their data on prem or on cloud?
Both – but increasingly in cloud & hybrid approach, as AWS’s growth, Atlas’s growth, and Okta’s research (https://www.okta.com/businesses-at-work/2019/) show.

Mary Meeker’s recent 2019 report had some relevant slides.
https://www.bondcap.com/report/itr19/#view/117
…Cloud % of Enterprise Workloads at 22% and rising.
https://www.bondcap.com/report/itr19/#view/118
…Cloud usage up +1000bps YoY
https://www.bondcap.com/report/itr19/#view/153
…Data Storage cloud use expected to double from ~22% to ~44% by 2024, surpassing enterprise on-prem by 2022.
https://www.bondcap.com/report/itr19/#view/157
… and for a fun exit, this captures my job pretty well as a data-focused developer.

-muji
long AYX, ESTC, OKTA, ZS, CRWD

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Again, muji, why not suggest it to the company with all the benefits you described in your initial post. Who knows, it might get the germ of an idea growing,
Saul

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