Honestly, ETL is pretty boring stuff to me…Why is Talend interesting to this board?
Hi Smorgasbord, Perhaps the current Talend isn’t the boring company you remember. For example, not only is the current growth rate of revenue well over 40% per year, but the rate of growth of revenue is accelerating enormously.
**Rate of growth of revenue yoy (percent)** 2015: 15 19 22 28 = 21 2016: 34 38 40 45 = 40 2017: 44
In the conference call they sound pretty euphoric and you might want to give it another look In the CC the CEO said the following.:
"Q. – If you think about that triple digit growth in cloud and big data for nine quarters now, have you seen any sort of competitor narrow the gap?
A. - We really like our differentiation right now in cloud and big data and our win rates remain ridiculously high, which is evident from the growth rate. We measure the deal cycle, and what we found was that big data and cloud had not just the highest win rates but also the shortest deal timing and so all of those basically are ways to clearly point to a strong advantage.
The market dynamic is that the large players continue to be challenged and long term I think most of the competitive battle is going to be fought with very small players that are trying to get up to scale right now. So we’re in this kind of special period in the middle right now (with no functioning competitors) and we’ll see how long that lasts.
But if I were to make a bet between a large player really, getting strongly focused and executing well, versus a small player doing something unique and different, our bets remain on the small players, but they’re not yet at the scale where they’re able to have an impact on the market…
"We’re now building relationships with both Microsoft and with Google in addition to the strong relationship that we have with Amazon
Our net dollar based expansion rate has been above 120% in constant currency for 12 consecutive quarters…
We are committed to our balanced planned approach of maximizing revenue growth and being free cash flow breakeven to slightly positive on an annualized basis"
In March, Herman Potter posted this on the board:
“I asked a very sharp 21 yr old (my son’s friend, who has been working for IBM), to look into Talend. His response follows”:
Talend is seeking to streamline the process known in computing circles as “Digital Plumbing”. That is, essentially taking data they’ve collected from several sources and either aggregating them into a new more useful set or converting them into a different or more useful output format.
For example, a company might take a database consisting of previous customer purchasing preferences and then combine it with a database of the customers address or city of residence to create a heat map of where in the country their products are selling best.
Generally this process requires some pretty in depth programming and database knowledge, but Talend has created a program which centralizes and streamlines this whole process. However, while the program is easier for a layman/non-programmer to use it still retains enough flexibility and extensibility to be used by more technical people.
Generally this level of data analysis and aggregation is only available to the bigger tech companies like Facebook, IBM, Apple etc. because the price point is so high. So their product is seeking to open up data analysis and aggregation capabilities that were once limited to the likes of Facebook to any company that exists in a data driven environment.
Now I wouldn’t say what they are doing is revolutionary in terms of technology but their idea is solid, their tech is good and the market they’re catering to is booming.
It’s my 6th largest position at 7.3%, and it’s a great company and has been a great investment.