Alteryx is not SaaS

If I was AYX, and I am focused on Data Scientist/Analyst community, and the rise of the CDO role as a trend - both of which are aggressively growing in the Global 2000 space - why would I want to pivot and shift my focus to integrating and operating a customer’s data from an average of 6 different sources, and then seven different outputs? What is the true gain or TAM expansion from hosting and operating their expanding product list? I instantly have to deal with security, performance complaints, networking, integrations and cloud hosting in multiple vendors. For what?

What you are saying is that it’s better for AYX not to be SaaS. All the OP is saying is that AYX is not SaaS

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.

https://discussion.fool.com/alteryx-is-not-saas-34231799.aspx

Denny Schlesinger

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Hi captain,

Let me clarify: I am not saying it is better/worse for AYX to be SaaS. The OP did indeed state AYX is not SaaS and in the multiple posts following there were discussion on the merit of this argument. I am not going to add more on that point.

The OP stated in his first post and even more directly in the followups that he believed that AYX customers (and thus AYX) would benefit from the scalability and reduced infra management that being a single or multi-tenant public cloud hosted service could provide. I am paraphrasing significantly.

My point was not to debate whether this would be “good” or “bad”, but more a point on timing and strategy. If AYX comes out and says that customers want a completely clientless experience from a browser, with zero infra to manage, and that they are shifting to deliver this, I would want to understand what this shift does to the “current” viability of AYX as an investment.

This would necessitate a shift in engineering/sales/strategy that would require them to neglect or deprioritize other endeavors. Ask NTNX how tectonic shifts such as these go if they are not managed with absolute precision, alignment, and clarity on change management to the market and customers - that may be an offtopic example, but it is absolutely relevant in my opinion.

I suggest that customers can obtain scalability with AYX with cloud based approaches, that address a lot (but not all) of what Muji has very well identified in his posts. This could be done today with no strategic shift from AYX. I would recommend these case studies to anyone interested, which fully describe how large customers have scalable solutions with cloud based infra, that address the points Muji identified.

https://www.alteryx.com/partners/technology-partners/amazon-…

Does this create the completely clientless and OS independent service? No. However, I do not currently think that AYX customers and potential customers weigh the lack of a 100% SaaS product as a reason not to implement AYX. AYX management does not seem to think this is a burning priority given the capability of server side solutions they have developed with MSFT and AMZN for Azure and AWS.

I believe AYX has a wide moat, and that even if a competitor were able to copy/paste what they deliver, but wrapped in a completely cloud service based product - this would take years, and existing AYX customers would strongly vet the viability of the new product. In the time this new competitor gets to market, I see AYX moving far beyond where they are today. As a step further, I think the dynamics of cloud based services would have even evolved so that we are talking about delivery models beyond SaaS/PaaS, etc.

From an investment standpoint, AYX is in a dominant position with how they deliver the product today. They may absolutely want to change this in the future, and for good reasons. As investors we have to watch to see where they believe their service delivery model needs to go and what that means to their overall strategy.

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90% margins
50% revenue rates
130%+ net expansion rate

Cloud…no cloud…margins are untouchable

SaaS…no SaaS… Net expansion rate is first class

This thread has droned into a lot of what if’s and theoretically on how AYX should run its business.

Simply put, they are one of the best performing businesses we follow. I think management is doing just fine.

Who cares if it is SaaS or not SaaS?!?!

Look at the numbers. Look at the history. Let’s stop the argument. Don’t over complicate it.

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Believe it or not, those numbers could be EVEN better with cloud. Think of it this way. If the numbers are this good even though people have to contend with purchasing servers, getting the software installed, getting internal support people trained, managing upgrades, etc. etc., how good would the numbers be if using Alteryx was suddenly as easy as signing up at a web site?

My company recently acquired Alteryx, btw, so I know exactly what I am talking about. Setting up on-premise software (any software) is no walk in the park. Medium and large companies are used to doing it of course. But small companies are not, and will always prefer a cloud offering to an on-prem offering because there is ALWAYS overhead with on-prem.

So as well as Alteryx is doing (because of the sheer value and quality of their software), they are still missing a whole chunk of the potential market because there is a whole slew of customers who just don’t want to deal with on prem software setup and maintenance.

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with purchasing servers,

I thought Alteryx was a client application?

It’s both. There is a client-only option, but there are features that are only available with Alteryx Server. For instance, Server is required if you want to be able to schedule workflows to run automatically, for sharing workflows through the Gallery, etc. Server also provides more horsepower and availability to run more complex/processing-heavy workflows without draining the resources of your desktop.

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So, even the server component is more like a batch run to offload the client and provide some automated services, so not really on the same level as the usual SaaS vs on premise contrast.

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