In a time when organizations are facing mounting challenges in securing their digital assets and complying with evolving regulations, cloud-based solutions have emerged as a linchpin for operational efficiency and security.

At the forefront of this crucial transformation is Qualys, which has established itself as a trusted provider specializing in a comprehensive range of cloud-based IT, security, and compliance offerings.

Qualys serves a diverse customer base that spans various industry sectors, from education and healthcare to manufacturing and retail. Enterprises, government bodies, and small to medium-sized businesses alike rely on Qualys for a multitude of use cases, be it safeguarding their digital infrastructure, ensuring regulatory compliance, or securing customer data.

Currently, the company is on an aggressive growth trajectory, investing heavily in research and development, and launching new products to expand its cloud platform. They are also focusing on continuously adding new features and growing their sales and marketing teams to help leverage their existing customer base of over 10,000 clients to further adopt more services. Qualys is also reaching out to new customers globally, partnering with other companies in the security industry to help get their products into new markets.

Recent acquisitions are extending the company’s capabilities with AI-based deep learning to discover and identify relationships and patterns which enable organizations to rapidly predict, detect, prioritize, and remediate activity that would normally be undetectable in traditional cloud solutions.

With this combination of innovation, customer relationship expansion, strategic partnerships, and tactical acquisitions, Qualys continues to solidify its place in cloud-based IT solutions.

Founded in 1999, Qualys initially focused on addressing the growing need for automated detection of network vulnerabilities. The company was among the pioneers in the SaaS security sector. Launching its flagship product, QualysGuard, in 2000, this software automatically scanned corporate local area networks for vulnerabilities and provided patch solutions, positioning Qualys as one of the first entrants in the vulnerability management market. Over time, the company expanded its product suite to include compliance checks, malware detection, and web application scanning.

Soon after Qualys went public on the Nasdaq in 2012, when it raised $87.5 million, the company launched its Cloud Platform. This was a transformative step that gave organizations the ability to audit and protect their IT assets in real time, whether they were located on-premises, in the cloud, or mobile.

Over two decades in the industry, Qualys has garnered strategic partnerships with top cloud providers, including Amazon Web Services, Microsoft Azure, and Google Cloud Platform. Additionally, it has collaborated with managed service providers and consulting organizations such as Accenture, BT, and IBM. Qualys is also a founding member of the Cloud Security Alliance, cementing its position as a thought leader in the industry.

Company veteran, Sumedh Thakar, serves as the President and CEO of Qualys. With a strong background in coding and a passion for cybersecurity, Thakar joined Qualys in 2003. Rising from an engineer to his current roles he is considered a “product fanatic” and has been instrumental in dramatically expanding the original platform’s scope, integrations, and automations. He also scaled the company’s engineering talent internationally with a global 24×7 “follow-the-sun” product team. In addition, he is a co-inventor of five U.S. patents for cybersecurity technology in Qualys’ offerings.

Joining Thakar, Pinkesh Shah is Qualys’ chief product officer with a broad range of responsibilities, overseeing Product Management, Product & UX Design, and various marketing functions. Under his guidance, Qualys has continued to evolve its product offerings, keeping pace with the changing demands and complexities of cybersecurity. Pinkesh has deep cybersecurity expertise and has led product, engineering, and marketing teams at companies including McAfee, BeyondTrust, Exabeam, netIQ, and IBM, among others.

Qualys offers a comprehensive cloud platform that is focused on IT security, compliance, and asset management. This suite of services, known as Qualys Cloud Apps, is designed to eliminate the need for multiple fragmented security tools, offering businesses a one-stop solution for all their needs. One of the standout features is the platform’s unified approach. Everything from web application to cloud security and compliance reporting can be managed centrally, saving time and reducing the complexity often associated with multiple, disparate IT security solutions.

Moreover, the platform provides real-time visibility and control over an organization’s security landscape. Physical and virtual sensors, coupled with cloud agents, ensure that businesses have an immediate and continuous view of their security posture. This is especially crucial for enabling quick and timely responses to any emerging threats.

Core services allow for easy asset tagging and management, enabling businesses to keep a well-organized inventory of all their IT assets. Reporting and dashboards are highly customizable, offering reports based on roles and different levels of access. While for remediation and workflow, Qualys helps automate the process of identifying and fixing vulnerabilities, making it easier for IT teams to maintain a secure environment.

In addition, the platform also employs Elasticsearch, enabling the big data correlation and analytics engine to offer instant search capabilities across large volumes of security and compliance data. Alerts and notifications keep teams constantly informed about new vulnerabilities, updates, or any significant changes to the security landscape.

Ensuring flexibility in deployment is another distinct advantage for Qualys, as customers have the option of using the cloud platform either through one of their 11 globally shared platforms or through a more customized, private platform. This makes the solution both scalable and cost-effective, whilst providing the flexibility to meet the specific needs and requirements of different organizations.

The versatility of the platform also makes it possible to cater to a wide range of organizations. Large enterprises often opt for Qualys for its robust and comprehensive features that are scaled to meet their expansive needs. Medium-sized businesses frequently use the Express edition of Qualys Cloud Apps, which is tailored to fit their specific scope and requirements. While for small businesses, the platform offers lighter versions that are ideal for companies with limited IT resources. Consultants and Managed Service Providers are also catered for with the Consulting Edition, which is specifically tailored for those who need to manage the security and compliance requirements of multiple clients.

In the real world, healthcare institutions might rely on Qualys to ensure compliance with HIPAA regulations with the platform identifying vulnerabilities in their network and offering remediation steps to fix them before they can be exploited. Retailers, especially those handling sensitive customer data, can use Qualys to conform with PCI DSS regulations, thereby avoiding hefty fines and potential loss of reputation. While software companies can benefit by leveraging the web application security features of the platform to protect their apps from common vulnerabilities like SQL injection and cross-site scripting.

In today’s digital age, where security threats are omnipresent, Qualys has carved a niche for itself as a leader in cybersecurity risk management, offering businesses a central, cloud-based platform for securing their operations. The platform provides real-time global insights into companies’ security and compliance, eliminating the need for expensive and complicated in-house solutions. Qualys’ focus is especially relevant as businesses increasingly look for outsourced cloud solutions to manage their IT security.

With a massive and expanding potential market across VM & Assessment, Compliance, IT Asset Management, Cloud Security, Endpoint Security, Security Analytics & Orchestration, Qualys is well-positioned to capitalize on numerous growth opportunities. Ongoing investment in product innovation and strategic partnerships is solidifying its position as a future-proof solution in an ever-evolving industry.

Qualys continues to evolve its product offerings to meet market demands, most recently releasing TotalCloud, designed to protect cloud-native applications. The company is also leveraging artificial intelligence and deep learning technologies to constantly improve the platform’s ability to predict vulnerabilities before they become major issues, whilst tailoring its approach to what customers actually need.

Partnerships have played a key role in the company’s strategy for growth. In particular, its maturing relationship with Amazon Web Services has allowed Qualys to integrate its services with other platforms and offer more comprehensive solutions. The company has also enhanced its capabilities through strategic acquisitions. The latest of which saw the assets of Blue Hexagon Inc. acquired in 2022. This addition further integrated machine learning into the platform, and has ultimately delivered an expansion of Qualys’ range of services and market share.

The strategies are yielding tangible results, with the company continuing to secure significant new and expanding contracts. In its latest quarter, it helped a Fortune 300 manufacturing firm solve a major security crisis, deploying a solution to over 40,000 assets in minimal time. They also expanded their engagement with a Forbes 1000 food manufacturer, offering them a more robust security package where fast remediation on a single console and consolidating agents on an integrated platform were all key differentiators in making Qualys the platform of choice.

For more than a decade, Qualys has delivered an impressive run of solid double-digit year-over-year revenue growth, culminating just short of half a billion dollars in 2022, after it rose 19% to close out the year at $489.7 million. The company is seamlessly carrying this momentum into the first half of 2023, as reported revenues hit $267.9 million for the first six months of the year This represented a $34.6 million or 13% increase, largely fueled by a 92% contribution from existing customers. This bump in revenue was mostly driven by U.S. customers, although a solid 36% came from international clients, while also being equally split between direct contracts versus third-party partners.

Despite the commensurate increase in both costs of revenue and operational expenses including research and development, and sales and marketing, as a result of ongoing investment in scaling the business, Qualys’ gross profit margin for the last 12 months sits at an impressive 80%, blitzing the sector median by almost 62%. These strong numbers have led to the company reporting a net income of $64.5 million for the first half of 2023, a solid 24% improvement on the prior comparative half.

Looking ahead, management is projecting total revenues to be in the range of $553.0 to $555.0 million, representing 13% growth year-over-year compared to 2022, in line with consensus expectations. Analysts are also expecting full year’s earnings per share to improve by 23% to $4.60, up from $3.72 in 2022.

Qualys operates in a highly competitive and fragmented market that focuses on IT, security, and compliance solutions. The company faces a mix of competitors, ranging from well-established firms like Broadcom (Symantec), CrowdStrike, and Palo Alto Networks to emerging private players like Axonius, Checkmarx, and Flexera, among others. In addition, Qualys also competes with in-house solutions that organizations may have developed internally.

While these competitors will attempt to further expand their presence in the market and compete more directly against Qualys solutions, the company continues to extend its cloud platform’s functionality. It is achieving this by further developing key competitive factors such as breadth of offerings, flexibility of delivery models, ease of scalability, deployment, and usage, in addition to total cost of ownership.

In a sector that is both complex and rapidly evolving, Qualys’ scalable and adaptive solutions provide it with a compelling competitive advantage. Its focus on innovation, strategic partnerships, and a diversified product suite positions the company well for continued revenue and profitability growth.

In today’s fast-paced and ever-disrupted markets, the ability to make informed decisions quickly is becoming more and more critical for staying competitive. The key to agility lies in harnessing vast amounts of data to derive actionable insights, drive decision-making and innovation, and transform the way companies operate and succeed.

Elastic is answering these critical business needs, offering a platform that excels in real-time data analytics driven by advanced search capabilities. Elastic specializes in search, observability, and security, providing organizations the tools they need to sift through data efficiently, maintain application performance, and fortify cybersecurity measures. The platform’s power now merges cutting-edge artificial intelligence with the company’s core search technology. While a versatile range of features positions Elastic as a go-to choice for organizations, big or small, seeking strong data analytics tools.

The company serves a diverse client base that spans multiple sectors, including finance, healthcare, and technology. Its use cases are equally varied, encompassing everything from business intelligence and customer experience to IT operations and security monitoring. Elastic engages with a broad developer community to capitalize on product-led growth, which not only targets new customers but also encourages existing ones to expand their usage across different applications and solutions.

The company is in an aggressive growth phase, focused on scaling its business to meet surging demand and capture a greater market share. It is putting particular emphasis on its cloud offerings which continue to be a key growth driver. Simultaneously, it continues to centre on creating user-friendly software to spur product adoption and expand its customer base.

Elastic started from humble beginnings when Shay Banon started with a project called Compass to create a search engine for his wife’s recipes. With the help of fellow founders Steven Schuurman, Uri Boness, and Simon Willnauer in 2012, this evolved into Elasticsearch, which quickly gained attention and set the foundation for Elastic as a search company.

Bolstered by two other open-source projects including Logstash by Jordan Sissel, a tool for ingesting log data, and Kibana by Rashid Khan, a visualization interface, these tools together became known as the ELK Stack: Elasticsearch, Logstash, and Kibana. By 2015, the company changed its name to Elastic to better represent its widening scope. The acquisition of Found, which provided managed Elasticsearch on AWS, consolidated their market offering.

In the years following, multiple product releases including Elastic Cloud, Enterprise, and Workplace Search made it easier for businesses to manage deployments in-house and the rising trend of remote work. While several more acquisitions including Endgame, build.security, and Cmd, broadened the company’s security offerings.

Since going public in 2018, Elastic has continued a rapid expansion and has become a key player in the search and data analytics industry with its growing variety of tools and focus on solving real-world problems.

Founder, Shay Banon continues to steer Elastic as the company’s chief technology officer. Banon has been instrumental in directing the company’s technology vision and is a major reason Elastic has become such an influential name in search and data analytics. With a background in computer science, before founding Elastic he worked on other software projects that laid the groundwork for his expertise in search technologies.

Since 2022, Banon has been supported by chief executive officer, Ashutosh Kulkarni. Before that, he was serving as Elastic’s chief product officer. As CEO, he has focused on expanding Elastic’s reach and enhancing its suite of products, especially in the areas of cloud and enterprise solutions. Kulkarni brings with him a wealth of experience in software product management and engineering from his previous senior product leadership and management roles at McAfee, Akamai, Informatica, and Sun Microsystems.

Elastic offers a comprehensive toolkit for organizations and developers aiming to manage and make the most of their data. Central to these offerings is the Elastic Stack, which consists of Elasticsearch and Kibana. Elasticsearch functions as the engine that powers search and analytics, capable of handling various types of data including textual, numerical, and even geospatial. While Kibana provides the visual front-end, acting as the user interface for all of Elastic’s capabilities. Together, these two core components offer a powerful solution for real-time data search, analysis, and visualization.

Supplementing this core functionality are additional tools including Elastic Agent, Beats, and Logstash, which help with the collection and ingestion of data. Agent monitors logs and metrics, Beats focuses on sending data from edge machines, and Logstash serves as a dynamic pipeline for data ingestion. These components work seamlessly to funnel data from myriad sources into Elasticsearch, setting it up for deeper analysis.

Other paid add-ons that provide further capabilities such as anomaly detection, data security, and real-time notifications allow companies to better meet compliance requirements and enhance their data usage experience. While specialized search, observability, and security solutions help to support mobile apps, customer support systems and internal workplace tools maintain a unified analysis across entire IT ecosystems, and provide a comprehensive approach to organizational cybersecurity.

With versatile deployment options to meet the needs of various organizations, coupled with speed, scalability, and an intuitive user experience, Elastic’s flexibility ensures that businesses of all sizes can effectively utilize the platform. This has led to a broad customer base that includes everything from small businesses and large enterprises to educational institutions and government entities, with more than 20,000 customers across various sectors.

In the real world, e-commerce websites use Elastic for their product search and recommendation features, news organizations rely on it to archive and rapidly search through years of publications, IT teams deploy it to monitor system health and performance, and security firms utilize its extensive defence solutions for comprehensive threat detection and management.

Elastic’s growth strategies are underpinned by several key opportunities and approaches to acquire new customers and expand within its existing customer base through new use cases and larger deployments. As users and customers increasingly want to consume highly scalable cloud solutions, the company continues to invest resources in driving further innovation and increasing the adoption of Elastic Cloud in particular. For new customers, this product provides the fastest and easiest way to get started with a free trial, while sales and marketing teams conduct campaigns to drive further awareness and adoption within the user community.

Often entering an organization through a single developer or a small team for an initial project or use case to quickly solve a technical challenge or business problem, knowledge of Elastic frequently spreads to new teams of developers, architects, IT operations and security personnel, along with senior executives. With ease of use a key differentiator, engineering efforts in collaboration with the growing user community, are focused on making products ever easier to use and adopt for both developers and non-developers.

Elastic is capitalizing on two primary trends. The first is Generative AI and its intuitive approach to interacting with massive amounts of information and generating new content, which is driving a resurgence of excitement around enterprise search. Businesses are recognizing the opportunity to create new customer and employee experiences and drive efficiencies in various business processes through the use of AI-powered search. This is opening up new opportunities for Elastic to build generative AI applications that work within an organization’s environment and with its proprietary data. Businesses need the ability to provide accurate context in real-time to large language models. And to do so in a way that does not violate their privacy or security policies. This requires a platform that can allow businesses to use their own or third-party models, irrespective of the type of data.

Built-in AI capabilities such as the Elasticsearch Relevance Engine (ESRE) and the platform’s ability to excel at multiple real-time use cases across search, observability, and security are making Elastic an ideal choice as a core element of their IT stack. In the last quarter alone, the company added several leading customers including a U.S.-based Fortune 100 global media and technology company, a leading file-sharing service, AI platform Labelbox, along with a major telecom equipment company, who are leveraging the platforms for a wide range of distinct use cases that are delivering valuable tangible benefits.

Secondly, Elastic’s platform is encouraging companies to consolidate various workloads, creating a one-stop solution for their needs. The company is securing large multi-year commitments as customers seek ways to lower their total spending without sacrificing innovation by bringing more workloads from other incumbent solutions onto the Elastic platform. Also in the last quarter, this trend has seen deals signed with Texas A&M University, one of the largest multinational communications and entertainment companies, and one of the leading Internet domain registrar and web hosting companies in the world.

On the go-to-market front, Elastic continues to focus on partnerships with the major cloud hyper scalers, as it recently earned top accolades from each of the three incumbents, Microsoft, AWS, and Google Cloud. Deep product integrations with these partners are driving significant growth as customers are making significant multi-year commitments to the platform through these cloud marketplaces.

Since going public in 2018, Elastic has delivered an impressive run of strong double-digit year-over-year revenue growth without exception. 2023 saw the company exceed a record $1 billion for the first time, as continued adoption of Elastic Cloud resulted in the product’s revenue surging by 42%. The solid trend has continued in the new year as revenue for the first quarter of FY24 rose 17% on the prior year, coming in at $294 million for the period. The strong start and better-than-expected results come as customers continued to consolidate vendors and significant activity around generative AI provided a compelling tailwind.

Elastic operates at a healthy 73% gross profit margin, a solid 50% premium to the sector median. And while the company has been operating at a GAAP loss, at $236.2 million for FY23, a significant portion of operating expenses include stock-based compensation. Consequently, non-GAAP income and margins have been improving most recently, coming in at $29 million and 10% respectively, for the first quarter of FY24, following a result of $46 million and 4% for all of FY23.

Looking ahead, Elastic expects its total revenue for FY24 to be between $1.24 billion and $1.25 billion, growing at 17% compared to last year in line with consensus estimates. The company expects non-GAAP earnings per share to be between $1.01 and $1.11, also in line with consensus expectations at $1.08, representing a surge of 330% over FY23. EPS is then expected to temper to a more modest 30% to 40% growth rate for FY25 and FY26.

The market for data analytics and search technology is highly competitive and fast-changing. Elastic faces a variety of competitors, each specializing in different. Major competitors include Solr and Lucidworks Fusion for search, Splunk and New Relic for observability, and CrowdStrike and Azure Sentinel for security. While big cloud providers like AWS offer diverging versions of Elastic’s technology.

Despite stiff competition and many competitors having greater resources, Elastic offers a comprehensive range of solutions for various use cases and its products are designed to be flexible and easy to deploy, allowing for tailored applications, while appealing to a diverse set of decision-makers, from developers to organizational leaders.

Elastic has positioned itself as a vital tool for organizations navigating a now data-driven world. As it continues to break revenue and profitability records thanks to its cutting-edge cloud services and AI capabilities, it looks set for sustained growth and continued market leadership.

Digital transformation has changed the dynamic for customer service and employee management across countless industries, reshaping them from mere support desks and admin functions into a crucial brand touchpoint and means for retaining top talent. This evolution has necessitated businesses, regardless of size or sector, to invest in robust tools that not only resolve issues, but also create loyal relationships.

Global SaaS provider, Freshworks, is meeting these challenges head-on with a product suite that spans a range of functions including customer relation management, IT service management, sales force, and marketing automation solutions, along with a messaging and chat platform. With products that are user-friendly, straightforward, adaptable, and cost-effective, the comprehensive offerings are helping over 63,000 businesses across more than 170 countries connect with their consumers and employees seamlessly, ultimately improving daily operations and communications.

Freshworks prioritizes built-in intelligence and automation to boost efficiency, enabling users to quickly adapt to the rising demands of modern customers and employees, while ensuring the platform delivers a robust return on investment for clients.

Having already achieved a significant global presence, the company continues to consolidate its market position with a strategy focused on product innovation, penetrating emerging markets, and nurturing a robust partner ecosystem. New features that leverage cutting-edge technologies like AI and machine learning are being introduced. At the same time, their global expansion efforts are underscored by localized solutions ensuring cultural and operational relevance. Lastly, their expanding network of partners continues to amplify their reach, enabling businesses worldwide to harness the benefits of the powerful platform.

After being inspired by resentment from Zendesk customers at rising prices for the popular customer support platform, former Zoho Corp colleagues Girish Mathrubootham and Shan Krishnasamy founded Freshdesk in 2010. The company began its journey focusing on cloud-based customer service software solutions.

In its early growth phase, Freshdesk not only developed its own proprietary solutions, it soon added value to its suite of services with acquisitions of 1CLICK.io, Konotor, and Frilp, leading to the launch of Freshsales, a customer relationship management platform.

In a significant rebrand in 2017, the company was officially renamed Freshworks Inc, reflecting a broader vision of products and services beyond just a helpdesk solution. By 2018, Freshworks was reporting an annual recurring revenue of over $100 million. The same year, it also launched Freshworks 360, a comprehensive product suite that combined the power of sales, support, and marketing software together, further solidifying its market position.

In addition to going public in 2019, continuing growth saw Freshworks debut at number 40 on the Forbes Cloud 100 list. It has also maintained impressive year-over-year revenue expansion which now exceeds more than half a billion dollars annually.

Girish Mathrubootham is the CEO and founder of Freshworks. In just over a decade, Girish has taken Freshworks from an idea to a leading software company empowering businesses to delight their customers and employees. Under his leadership, Freshworks has expanded its operations to 13 global locations to serve customers throughout the world. He is also a prominent venture capital investor and adviser to over 60 companies, and a founding member of SaaSBOOMi, Asia’s largest community of founders and product builders.

Freshworks delivers a suite of software solutions for business users across customer experience (CX) and IT service management, along with sales and marketing automation solutions. The suite of products and its appeal encompasses a vast array of sectors and company sizes, from small start-ups to global giants.

Furthermore, the company has pioneered a distinctive approach to delivering business solutions. With a commitment to product-led growth, it has crafted its suite of products that not only attract a diverse range of customers, but also create avenues for sustained expansion. This approach relies heavily on ensuring the user experience is at the forefront, leading to greater user adoption and loyalty.

For customer-facing teams, the CX family of products including Freshchat and Freshdesk simplify and streamline customer support with a centralized dashboard where businesses can manage customer tickets, prioritize issues, and ensure swift and effective resolutions. Its ability to integrate with other channels, like social media and email, makes it an encompassing solution for companies looking to boost their customer service response rates and overall satisfaction scores. In the real world, an online retailer might use Freshdesk to handle customer queries about order statuses, product information, and return requests. Integrated with an inventory system, customer agents can quickly provide updates and solutions. For example, a travel firm may deploy Freshdesk to manage trip cancellations, itinerary changes, or travel advisory updates, providing timely assistance to travelers.

For employee-facing teams, and targeting the specific needs of IT teams, Freshservice provides both the intelligence and automation businesses need to give employees a “consumer” like experience that many now expect. The product ensures that internal technical issues, from hardware malfunctions to software glitches, are tackled promptly. In practice, large universities can track and resolve tech issues for students and staff, from Wi-Fi outages to software installation requests, while a hospital could manage its vast inventory of medical devices, ensuring timely maintenance and addressing malfunctions.

Catering to sales and marketing teams, Freshsales provides CRM software that simplifies lead tracking, streamlines communications, and ensures that businesses can maximize their sales potential. With features like email tracking and advanced analytics, sales teams are equipped to approach leads with more strategic insights. While Freshmarketer delivers a holistic marketing automation solution that enables businesses to craft, manage, and assess campaigns with ease, ensuring that marketing efforts translate into tangible results. Freshsales allows real estate agents to track potential clients, schedule property viewings, and follow-up communications to ensure no lead is overlooked. While with Freshmarketer, a fashion brand can promote a new line, by segmenting their customer base and sending targeted email campaigns, measuring engagement and conversion rates.

Central to Freshworks’ strategy is the simplicity of its products combined with robust functionalities. By offering trial versions of its software, the company allows potential customers to experience firsthand the efficiency of its tools. With pricing that is transparent, affordable, and easy to understand, reducing the length of sales cycles and increasing the efficiency of marketing and sales, it is disrupting the traditional top-down sales motion, letting users, not executives, designate Freshworks as their software of choice.

The company also benefits from a flexible go-to-market approach that allows it to respond to how businesses want to buy its products. For instance, smaller businesses benefit from a low-cost, low-touch model, ensuring efficiency. Meanwhile, larger enterprises, especially specific departments or divisions within them, receive targeted attention, catering to their unique needs. This tiered approach maximizes reach without compromising the quality of service. This approach is proving successful as larger customers continue to fuel growth in the business.

Providing a compelling tailwind, companies today, both big and small, must adapt to the digital era. Larger firms need to become quicker in their decision-making and processes, while smaller firms must provide top-notch service to compete. As robust data is now central to key business decisions, Freshworks has created the Freddy AI Copilot for developers which enables a fast and intuitive app development experience to incorporate machine learning features across all of its products.

The company is steadily scaling towards a multi-billion dollar valuation by further strengthening its position in its three large total addressable markets.

In the IT and employee service space, Freshworks sees significant opportunities to innovate within IT and adjacent spaces, particularly targeting managed service providers, security operations, governance, risk and compliance, as well as government applications. In customer service, it is building upon a history of innovation to provide an all-in-one customer service suite, specific industry, quality, workforce, and agent performance management and training solutions, along with field service management applications. While in the sales and marketing sectors, Freshworks is seeking to create a unified CRM to accelerate growth with its generative Al enhancements, highly personalized experiences, and conversational commerce capabilities.

Also of particular note, India is central to Freshworks’ operations, employing 85% of its global staff, allowing for faster innovation with a cost advantage that enables it to operate more efficiently and compete globally.

Over the last three years, Freshworks has delivered an impressive run of strong double-digit year-over-year growth between 30% and 50% annually. After closing out another record year in 2022, achieving just short of half a billion dollars in revenue, the company has continued this robust trajectory in 2023, again increasing 20% for the first half, hitting $236.1 million for the six months. This was primarily driven by increases in additional agents enabled by customers under their account, sales of products to existing customers, as well as the addition of new customers. In the second quarter, in particular, new generative AI enhancements launched across Freshworks’ product lines outperformed estimates across all of the company’s key financial metrics.

Fortunately, the increase in cost of revenue was far more tempered at only 8%, or $3.7 million for the last six months primarily due to third-party hosting costs and software license fees. Increases in operating expenses were similarly restrained at just 7%, with moderate rises in personnel-related costs due to annual compensation adjustments and changes in stock-based compensation expense, partially offset by a decrease in advertising, marketing, and branding expenses. Consequently, net losses are gradually improving each quarter, now reaching just $35.7 million in the latest period.

Looking ahead, management is forecasting to end FY23 with total revenue of $587 million to $591 million, representing year-over-year growth of 19%, matching consensus expectations. Analysts are also forecasting for full-year earnings per share to improve significantly from a $0.07 loss per share in 2022, turning around to a $0.20 profit in 2023, starting a trend that is expected to return 40% year-over-year improvements in subsequent years.

Freshworks operates in a highly competitive environment. Many companies including giants like Salesforce, Zendesk, Oracle, and ServiceNow, as well as newer entrants like Atlassian offer products and services similar to what Freshworks provides. However, most of these competitors focus on specific areas like customer service, IT management, or sales and marketing.

In addition to providing a more comprehensive suite of solutions that now allows for smart automation and the use of artificial intelligence, Freshworks not only prioritizes the needs of their users, making their products easy to use, but it also ensures that customers quickly see the benefits of using their products. The platform provides a smooth experience and can be tailored for any business, big or small, while offering good value for money with quality at an affordable price.

Freshworks has adeptly navigated the digital transformation era, evolving from a customer service software company to a comprehensive solution provider empowering businesses around the world. Bolstered by user-friendly, adaptable products and strategic innovations, the company’s robust growth trajectory and its unique approach to meeting both customer and employee needs position it as a formidable player amidst heavyweight industry competitors.

Over the last decade, we have welcomed more and more digital services and products into our lives and integrated them into nearly every activity we take part in. Consequently, personalized customer experiences where businesses engage with consumers seamlessly across various platforms and touchpoints have become increasingly important.

Braze is servicing this growing need with its leading customer engagement platform that facilitates interactions between consumers and brands to build and maintain direct, meaningful relationships with their customers. The platform empowers brands to listen to their customers better, understand them more deeply, and act on that understanding in a way that is human and personal. It offers a suite of tools ranging from messaging channels and AI-driven analytics to campaign creation and optimization, all geared towards fostering genuine and timely interactions.

Whether it’s e-commerce giants keen on optimizing shopping experiences, travel agencies wanting to offer timely deals, or fintech firms focusing on personalized financial advice, Braze’s solutions cater to a vast array of use cases. The technology provides brands the flexibility to adapt and engage based on user behaviors, preferences, and real-time data, making it a go-to solution for industries striving for contextual and personalized user interactions.

With a strategy defined by relentless innovation, the company continues its expansion into newer markets, deeper integration capabilities with other tech ecosystems, and a steadfast commitment to enhancing the user experience. Using these focused strategies, Braze aims to further solidify its position as the preferred choice for brands looking to elevate their customer engagement game in the modern environment.

Braze was founded in 2011 in response to the major step change ushered in by the smartphone. Bill Magnuson, Jon Hyman, and Mark Ghermezian created Braze (formerly known as Appboy) as a response to the evolving mobile landscape and the need for more effective, real-time, and personalized customer engagement. They identified that the crux of modern marketing was moving beyond mere audience segmentation and into truly individualized messaging, which the trio felt was lacking in the current market.

The early days of Braze focused primarily on mobile app engagement. Initial traction was moderate, but as businesses began to recognize the importance of personalized, real-time communication, Braze’s user-centric, data-driven platform found its fit. By 2014, the company had grown its user base substantially and was managing billions of messages per month.

Recognizing the need for flexibility in the tech ecosystem, Braze soon expanded its capabilities beyond mobile. By 2016, the company had introduced various new channels, including email, web messaging, and in-product messaging. Integration capabilities with other tech platforms like Segment, Amplitude, and Mixpanel also started taking shape.

As the company expanded its footprint setting up offices around the world, Braze underwent a rebranding from its original name, Appboy, signaling a broader shift from a mobile-centric vision to a comprehensive, holistic approach to customer engagement across all digital touchpoints.

Braze went public in 2021 after its IPO raised half a billion dollars. The company has continued to enhance its product suite, introducing features harnessing AI and machine learning to offer predictive analytics, customer journey optimization, and more.

Co-founder Bill Magnuson still serves as Braze’s chairman and CEO. Under his leadership, Braze has witnessed exponential growth as he has been instrumental in evolving the company from its early mobile-centric roots to a leading global customer engagement platform. Magnuson’s visionary approach as both CEO and previously CTO has consistently steered Braze towards innovative solutions. Prior to Braze, Magnuson was a software engineer with both Bridgewater Associates and Google.

Fellow co-founder Jon Hyman is also still with Braze as CTO, taking on the position in 2017 following his role as CIO since the company began. Hyman has overseen the platform’s seamless scalability, enabling it to handle tens of billions of messages per month while ensuring data integrity and real-time engagement. He also worked at Bridgewater Associates, where he gained insights into building large-scale, high-performance systems.

Braze’s platform helps brands to build lasting relationships with their consumers in a dynamic digital environment. This has been achieved through a comprehensive suite of tools that focuses on real-time, data-driven, and highly personalized interactions.

Most cross-channel marketing automation platforms available approach customer engagement on a channel-by-channel basis, which creates disjointed customer experiences and diminishes customer loyalty. Braze was built on the premise that brands must create personal and human connections with consumers through the consistent delivery of positive customer experiences.

Using the platform, brands ingest and process customer data in real-time and then orchestrate and optimize contextually relevant, marketing campaigns across multiple channels. This avoids the data and engagement silos that marketing point solutions create so that each touchpoint across channels and platforms is aware of other engagement events and can react to that activity in real-time.

In addition to a comprehensive backend of management, customization, and monitoring functionalities, at the heart of Braze lies its messaging capabilities, which allow brands to reach out to their consumers through a myriad of channels, including email, push notifications, in-app and web messages, and more. This approach ensures that customers receive messages at the right time, on the right platform, and in the most engaging manner.

Beyond messaging, Braze offers a rich suite of analytics tools that are powered by AI. These provide actionable insights into customer behavior, allowing businesses to tailor their strategies for maximum effectiveness. With tools like Canvas Flow, brands can tap into real-time data flow and make instant adjustments to their campaigns based on performance metrics. This enables brands to design customer journeys that are not only personalized, but also react dynamically based on individual behaviors and data. With this, businesses can map out intricate, multi-step campaigns across various channels, ensuring that every customer interaction is meaningful and timely.

Recognizing that businesses operate within vast tech ecosystems, Braze Currents seamlessly integrates customer data with other tools, including data warehouses, analytics platforms, and other marketing tech stacks to ensure customers can deliver a holistic experience.

From Pizza Hut to HBO to Venmo, Braze’s diverse customer base can use the platform to deliver personalized welcome messages to new customers, celebrate milestones, inform of new products and services, and inspire new usage, ultimately creating vastly more growth opportunities.

Businesses are increasingly recognizing the power of personalized communication and real-time interaction, consequently, Braze has and is positioning itself to cater to these nuanced needs with its sophisticated capabilities. Future growth opportunities are heavily leveraging development in AI-driven customer engagement particularly using first-party data. For several years, Braze has already had dedicated teams of data engineers and data scientists, focused on using machine learning to build AI into its product, to make marketers more effective and engage their end users by optimizing customer journeys, generating more relevant content, and enhancing targeting strategies.

The company debuted a GPT integration for email subject line generation over a year ago and was early to integrate generative AI for images into the message composition experience, launching a dashboard integration last December. More recently, it also launched a message content-checking tool, built on top of GPT4, helping marketers to avoid copyrighting mistakes, the accidental sending of text messages, or sending culturally insensitive content. Ultimately, lowering the burden of content creation encourages customers to bring new use cases into the Braze platform more quickly.

As companies become more data-driven, the need for granular segmentation, tailored reporting, and deriving actionable insights from their vast datasets will only intensify. Braze is also testing a wide array of new capabilities including generating SQL for advanced segmentation and reporting use cases, automatically suggesting improvements to message copy during composition, and even an adversarial AB testing simulator that the company believes may be able to generate and predict winning message variants for populations before a campaign is even launched. This capability can allow businesses to refine their strategies even before implementation, thereby ensuring higher success rates and ROI.

Braze’s proprietary, enterprise-grade stream processing architecture is enabling the company to exploit real-time interactions, and in turn, the emerging trends of real-time first-party data collection and integration of messaging within product experiences. This, coupled with Braze’s educational endeavors, can help onboard businesses that are in the early stages of adopting modern customer engagement practices.

Moreover, while expanding the use of the Braze platform with existing customers by adding new channels and increasing the messaging volume its sells remain key pillars of the company’s growth strategy, smoothing the on-ramp for new customers is a key part of ensuring that the differentiation presented by Braze’s sophisticated capabilities remains accessible to its ever-growing market. Even to those who are early in their journey of adopting the modern practice of customer engagement.

Since going public, Braze has maintained an impressive trajectory in revenue growth, delivering its third consecutive year-over-year increase of around 50% in FY23. This continuing trend saw revenue reach $355.4 million for the year, up from $238.0 million in FY22. This uptick is attributed to a substantial influx of new customers, robust upsells, and consistent renewals. The opening quarter of FY24 also started strongly with revenue of $101.8 million also including new business wins and upsells from the likes of Procore Technologies, Sonos, Sweetgreen, and Swimply.

Braze’s robust growth has not come without solid increases in sales and marketing, R&D, and general and administrative expenses, which rose by 63% to $387.7 million in FY23. The company is heavily focused on expansion and while net losses increased by more than 81% to $140.7 million, its successful IPO raised $467.9 million and issued close to nine million shares, resulting in a marked improvement in losses on a per share basis.

Looking ahead, Braze’s management is forecasting to close out FY24 with total revenue of $442.5 to $446.5 million, in line with consensus expectations for year-over-year growth of 25%. Earnings per share are also forecasted to continue its positive trend, going from a loss of $0.64 to a loss of just $0.51, marking a 20% improvement year-over-year.

Braze faces intense competition from software companies that offer marketing solutions, such as legacy marketing clouds like Adobe and Salesforce, and point solutions like Airship, Iterable, Leanplum (Clevertap), MailChimp (Intuit), and MoEngage.

In some cases, these companies benefit from greater name recognition and resources, longer histories, lower costs, and more mature intellectual property portfolios. Larger competitors, in particular, may use their broader offerings to bundle products with other functions or even close access to their technology platform, making it more difficult for customers to integrate other platforms. In addition, these competitors may have an advantage in markets where Braze’s policies regarding the use of customer data are more restrictive than local laws. For example, competitors willing to sell customer data in markets where such activity is permissible may have a pricing advantage over Braze in such markets.

However, while several established and emerging competitors address specific aspects of customer engagement, Braze believes that none of these market participants currently offer comparable comprehensive customer engagement solutions.

As more businesses pivot towards automating and optimizing their marketing campaigns, Braze’s tools are becoming indispensable for crafting relevant, engaging, and timely content. Its intelligent, real-time, and personalized interactions are setting the gold standard for future-oriented customer engagement.

As IT administrators grapple with more data, coming from more places, more connected devices, and more software-as-a-service based applications, the cloud is fundamental to establishing a new normal. Traditional network offerings are not well-suited to fulfill enterprise expectations for rapid delivery of new services, more flexible business models, real-time response, and massive scalability.

Extreme Networks is servicing this ever-increasing demand as a leading provider of end-to-end, cloud-driven networking solutions, services, and support covering the spectrum of needs from the Internet of Things edge to the cloud. Extreme designs, develops, and manufactures wired and wireless network infrastructure equipment, as well as a leading cloud networking platform and applications portfolio using machine learning and artificial intelligence to deliver network policy, analytics, security, and access controls. Importantly, its solutions enable companies to embrace the value of new cloud technology without having to decommission and replace existing infrastructures.

Extreme has been pushing the boundaries of networking technology for a quarter of a century, delivering flexibility and scalability in the deployment, management, and licensing of networks globally. Its broad footprint provides service to over 50,000 customers and over 10 million daily end users within some of the world’s leading names in business, across a multitude of industries and verticals.

With exposure to the fastest-growing areas of the networking market and new use cases providing ample opportunities to drive growth long-term, Extreme is continuing to leverage the strength of its unique solutions in the enterprise market.

Extreme Networks was founded in 1996 in California, by Gordon Stitt, Herb Schneider, and Stephen Haddock. The three of them were driven by the conviction that open, standards-based networking would fuel the next generation of technology and innovation. In its nascent stages, the company emphasized high-performance, top-tier products which enabled them to rapidly garner attention from businesses seeking robust networking solutions.

By the early 2000s, they expanded their product line to encompass a range of switches and routers, catering to various scales of business needs. Several acquisitions including Enterasys Networks and Aerohive Networks, along with distinct business units from the likes of Zebra Technologies, Brocade, and Avaya among others, helped Extreme expand its range and market reach, broadening its network infrastructure capabilities, especially in wireless technologies, and software-driven cloud solutions.

In recent years, as the tech world increasingly leverages artificial intelligence, Extreme has been no exception with additions such as ExtremeCloud IQ adding AI-driven network solutions, automation, and IoT integrations.

Ed Meyercord has served as Extreme’s president and chief executive officer since 2015 during which time he has led multiple strategic acquisitions, a pivot towards cloud-based solutions, and substantial financial growth. His tenure with the company goes back to 2009 having previously held both director and chairman roles with the board. Prior to assuming an operating role at Extreme, Meyercord was CEO and director at Critical Alert Systems LLC, a software-driven, healthcare information technology company that he co-founded in 2010. He also served as CEO, president and director of the communications services companies, Cavalier Telephone & TV and Talk America Inc. Meyercord was also a vice president in the investment banking division of Salomon Brothers, which became part of Citigroup.

While as chief technology and product officer, Nabil Bukhara leads the vision, strategy, and delivery of Extreme’s portfolio. Bukhara joined Extreme as part of the acquisition of Brocade following key leadership roles at various companies including Cisco, Seagate, SonicWall, and Riverstone Networks. He has more than 20 years of experience within the technology sector and is a global authority in portfolio strategy. He frequently speaks at international summits and writes columns for well-known publishers about the role of technologies like machine learning and artificial intelligence in networking.

Extreme offers a diverse range of cutting-edge networking products and services designed to foster seamless connectivity, enhanced security, and unrivaled performance. The end-to-end portfolio of cloud-driven solutions provides visibility, control, and strategic intelligence from the edge to the data center, across networks and applications. Solutions include wired and wireless switching, wireless access points, WLAN controllers, routers, and an extensive portfolio of software applications that deliver AI-enhanced access control, network and application analytics.

Extreme’s flagship offering, ExtremeCloud IQ, provides a centralized platform to orchestrate and manage network infrastructure. The platform is designed for agility, enabling IT teams to monitor, analyze, and make data-driven decisions in real time. Through the use of AI and machine learning, it offers predictive insights, ensuring any potential network issues are mitigated before they escalate.

Boasting one of the industry’s most comprehensive wireless portfolios, Extreme’s access point solutions are proven in some of the most demanding environments, powering large venues and stadiums as the Official Wi-Fi & Analytics Provider for the NFL and the MLB. While its wired solutions enable the deployment of high-speed performance at scale for high-density, campus, and data center environments, catering to a variety of speeds and connectivity options.

The breadth and adaptability of Extreme’s product portfolios have its customers ranging from small businesses to sprawling enterprises across various sectors. Educational institutions leverage Extreme’s networking solutions to offer students seamless digital experiences. Healthcare providers depend on their robust network infrastructures to access critical patient data in real time. While retail giants employ Extreme’s solutions to ensure smooth transactions and personalized customer experiences. Moreover, the versatility of Extreme’s products allows them to integrate seamlessly with a variety of other platforms and systems, ensuring that organizations can extract the maximum potential from their existing IT ecosystems.

5G is the first generation of cellular technologies built on cloud-native principles, and most traditional network visibility tools cannot be easily adapted for future use cases like autonomous vehicles or industrial IoT, therefore would normally require expensive, time-consuming infrastructure upgrades. However, Extreme has introduced switches and related software with cloud-native design to provide customers with full visibility into every aspect of the network, from a highly geographically dispersed environment with regions and zones to the services running on the system.

Extreme also provides an extensive list of service and support offerings. They maintain global Technical Assistance Centers that provide round-the-clock technical support, premier support services for more proactive management, professional services for personalized network solutions, and comprehensive education and training programs to ensure customers and partners derive maximum value and understanding from Extreme’s products.

Modern enterprises are navigating a rapidly changing IT landscape. The escalating demand to implement new IT delivery models and applications is necessitating significant network modifications, extending from the outermost access edge to the heart of the data center. The covid pandemic also amplified the need for IT teams to gain unprecedented control and insights, to be not just secure, but also maintain smooth operations. With a torrent of data streaming from a myriad sources, a multitude of connected devices, and a surge in SaaS applications, the cloud is the foundation of a new operational paradigm. Conventional network offerings are struggling to meet enterprise expectations for swift service deliveries, agile business models, instantaneous responses, and vast scalability.

Extreme has strategically positioned itself, leveraging its technology to orchestrate distributed network architectures. Notably, the cloud networking segment, which the company currently estimates at $2 billion, is forecasted to be the industry’s fastest-growing segment. Extreme’s cloud offering stands out for its robustness, versatility, intelligence, and security, from the cloud’s vantage point. It has seamlessly simplified network adjustments to enable clients to transition to cloud-managed switching and Wi-Fi, and thanks to its “Cloud Choice” philosophy, agnostic of the existing networking or wireless equipment they already have installed. The outcomes for these enterprises are compelling with reduced operating and capital expenditures, a slashed total cost of ownership, amplified flexibility, and bolstered network resilience.

Machine learning and artificial intelligence technologies are also emerging as pivotal. By harnessing vast datasets across capable infrastructure, organizations can enhance accuracy and deliver resolutions that elevate network operations. This potential is further magnified when integrated with cloud-driven networking and automation, as it empowers administrators to swiftly scale, ensuring productivity, accessibility, security, and speed across even the most distributed networks. Extreme’s cloud management technology has evolved significantly over the past decade, delivering a combination of innovation and reliability with the leading end-to-end cloud management platforms powered by ML and AI.

Extreme estimates its total addressable market for enterprise networking solutions spanning cloud networking, wireless, campus, software-defined local area networks, data center networking, and ethernet switching solutions at $26 billion, growing at five percent annually over the forthcoming years. While the company’s uniquely crafted products, solutions, services, and geographical focus positions it to tap into $16 billion of this market. In addition, the emergence of 5G is expected to carve out an additional estimated market worth $3 billion for service provider networking, a segment that Extreme is targeting to grow to approximately $50-$100 million per year over the next three to five years.

Over the past decade, Extreme has been delivering a robust record of revenue growth. FY23 marked the second consecutive year of double-digit increases with total revenue again hitting a new record after reaching $1.3 billion following an 18% improvement. The increase was driven by strong demand for Extreme’s products and higher shipments resulting from an easing in supply chain constraints which had impacted the company’s ability to fulfill the demand, along with modest growth in the subscription business.

Record profitability and cash generation also headlined Extreme’s latest results as gross margins improved significantly to 59% for FY23. The company also established a net cash position of $10 million after doubling cash generation, and even repurchasing $100 million worth of shares, and paying down $80 million in debt, putting the year-end balance sheet in its most robust financial position ever.

Looking ahead, consensus estimates have Extreme growing sales in 2024 by 15% to $1.51 billion. Analysts are also forecasting for full-year earnings per share to improve by 43% to $1.55 per share in 2024, followed by a further 28% improvement to $1.99 in 2025.

The market for network switches, routers, and software including analytics is extremely competitive and characterized by rapid technological progress, frequent new product introductions, changes in customer requirements, and evolving industry standards.

Extreme competes directly with giants including Cisco Systems, Hewlett-Packard, Huawei, and Arista Networks among others. It also expects to face increased competition from both traditional networking solutions and cloud platform companies offering Infrastructure-as-a-Service and Platform-as-a-Service products to enterprise offering from the likes of Amazon, Microsoft, and Google providing a cloud-based platform of data center compute and networking services for enterprise customers.

However, Extreme’s competitive advantage lies in its innovative end-to-end cloud architecture powered by ML and AI, offering enterprises effortless networking solutions that seamlessly adapt to the evolving IT landscape. Their hybrid and agnostic approach, which combines both cloud and on-premises solutions, also ensures that customers enjoy unparalleled flexibility, visibility, and control.

Extreme Networks have become a key player in the cloud-driven networking sector by meeting the burgeoning demands of an IT ecosystem overwhelmed with data from ever-increasing sources. As it remains at the forefront of technological advancement integrating artificial intelligence into its offerings, Extreme is continuing on an impressive growth trajectory capped off by record revenue. Despite strong competition, the company’s unique end-to-end cloud architecture and hybrid solutions present it with a distinct edge, ensuring adaptability and efficiency in an ever-evolving tech landscape.

As digital transformation continues to reshape industries, the necessity for reliable, real-time, and scalable data streaming services is paramount for businesses seeking to effectively leverage their data assets.

Confluent is on a mission to set this data in motion. The company has pioneered a new category of data infrastructure designed to connect all the applications, systems, and data layers of a company around a real-time central nervous system.

Confluent has created a data streaming platform based on Apache Kafka, an open-source stream-processing software that enables businesses to harness the power of real-time information by offering seamless integration and processing capabilities. The platform allows companies to access data as live streams, thereby providing insights, driving decisions, and creating innovative products and services.

These capabilities make it possible for clients to create rich, digital front-end customer experiences as a primary way of interacting with customers. It also allows them to maintain up-to-date, software-driven back-end operations for a broad range of clientele spanning from emerging start-ups to Fortune 500 companies, across sectors including retail, finance, logistics, and technology among others.

Having transitioned from a promising start-up to a leading name in the data streaming services sector, Confluent continues to focus heavily on expansion. In addition to enhancing its product portfolio and offering more comprehensive, user-friendly, and secure data streaming solutions, the company is focused on driving growth by expanding its global presence, capturing new markets, and leveraging its existing client base, as well as its vast open source community and partner ecosystem.

Confluent was established in 2014 by Jay Kreps, Neha Narkhede, and Jun Rao, three of the original developers of Apache Kafka at LinkedIn. They aimed to harness the power of real-time data streams and provide businesses with the tools to navigate the emerging data landscape.

In the early years, Confluent focused on offering support, training, and tools around the open-source Apache Kafka platform. The demand for more comprehensive data solutions led to a rapid acceleration in Confluent’s growth and customer base and by 2015, the company had released the first iteration of Confluent Platform, which included a range of additional tools that made Kafka easier to use and manage.

In 2017, the company introduced Confluent Cloud, a fully-managed streaming data service on the public cloud, initially launched on Amazon Web Services. The cloud offering brought Kafka’s capabilities to a wider audience by eliminating the operational burden, thereby experiencing a swift uptake across a broad spectrum of businesses.

As the product matured, Confluent expanded the breadth and depth of its offerings, including security features and connectors for widely used data systems. They also started developing integrations with other major enterprise software companies.

Confluent went public in 2021, which further fueled its global expansion and product development, as the company continued to innovate. It acquired several technology companies and released new features, notably Data Coral and Data-in-Motion which helped to extend the company’s data integration capabilities and develop more comprehensive data streaming solutions.

Co-founder Jay Kreps continues to lead Confluent as chief executive officer. He is an industry-recognized thought leader with an impressive background in technology and data infrastructure. Before Confluent, he worked at LinkedIn where as a principal staff engineer, he co-created Apache Kafka. Under his leadership, Confluent has experienced substantial growth and has expanded its offerings and partnerships. In addition, he is also the author of several popular books and papers on data infrastructure and distributed systems.

Fellow co-founder and Apache Kafka co-creator, Jun Rao, also continues to serve at Confluent, helping advance the technology of Apache Kafka and helping users adopt Kafka-based solutions more easily. He is the co-author of more than 20 referenced research papers, and the co-inventor of more than a dozen U.S. software patents, His deep understanding of data systems has been invaluable in shaping Confluent’s technology vision.

While not part of the daily operations, fellow co-founder, Neha Narkhede, remains on the Confluent board.

For enterprises to deliver rich customer experiences, it is critical for all of their business functions, departments, teams, applications, and data stores to have complete connectivity, be thoroughly integrated, and be able to analyze data as it is generated. Confluent is designed to be this intelligent connective tissue by having current data from multiple sources constantly streamed across an enterprise for real-time analysis.

The company’s offering enables organizations to deploy production-ready applications that run across cloud infrastructures and data centers, with enhanced features for security and compliance. Confluent’s solution can be deployed either as a fully-managed cloud-native SaaS offering available on-demand, Confluent Cloud, or an enterprise-ready, self-managed software offering, Confluent Platform. The cloud service offers infinite scalability, robust security, and reliable disaster recovery mechanisms, and it supports hybrid and multi-cloud environments to meet diverse deployment needs.

As organizations mature in their adoption cycle, the platform enables them to build more and more applications that take advantage of data in motion. Businesses can continuously provide better and differentiated customer experiences, such as suggesting the next show to watch in real-time or providing live information on the status of a grocery order; whilst concurrently driving data-driven business operations such as real-time, preventive maintenance, IoT analytics, and diagnostics.

The platform enables customers to start developing instantly, without any internal or external operational barriers, accelerating time-to-market and also reducing the costs associated with shifting to a data-in-motion architecture. In addition, Apache Kafka has an extremely robust developer community, with more than 65,000 members which is driving usage across an estimated 75% of the Fortune 500. Confluent continues to leverage these open-source developments and has helped build an ecosystem of contributors.

In retail, companies like Target are using Confluent to maintain accurate inventory tracking across multiple channels to ensure a consumer can have an up-to-date snapshot of what is actually in-store, versus leaving a consumer disappointed on arrival when the product that they thought was available is out-of-stock. Manufacturers like Bosch are harnessing a real-time flow of data from IoT sensors to deliver predictive maintenance and reduce downtime, versus episodic, manual inspections of equipment. While in financial services, for firms like ING Bank, Confluent is the difference between detecting and preventing fraud versus reacting afterward.

In addition to the core platform, the company provides professional services offering expertise and tools that help customers plan, implement, monitor, and optimize their platform and applications. Training and certification guidance, technical resources, and access to hands-on training and certification exams are also available. While a certification program enables technical personnel to demonstrate and validate in-depth knowledge of data in motion.

As data continues to permeate every aspect of business, the opportunities for Confluent to expand are vast. The company is capitalizing on the burgeoning demand for real-time data processing and movement, as additions including ksqlDB and Stream Designer continue to extend the platform’s capabilities and make it easier for organizations of any size to harness data in motion without intensive developer engagement.

Confluent’s growth strategy aims to exploit this significant market opportunity through several avenues. This includes leveraging its cloud-native capabilities to enable seamless and frictionless customer onboarding with a low entry, no commitment, pay-as-you-go model. Their integrated go-to-market model focuses on nurturing customers through all stages, from initial interest, to first production project, to enterprise-wide platform deployment.

After acquiring a new customer, Confluent seeks to grow its footprint by solving additional use cases for that customer. Once one application is connected to the platform, customers often connect other applications to that first application, resulting in a flywheel where Confluent can permeate the enterprise, and create a powerful network effect, further driving growth.

Confluent’s open-source roots provide a large pool of developers and enterprises both inside and outside of the company, who are building connectors, more functionality, and deploying patches, both to Apache Kafka and Confluent’s proprietary offering. This leads to a virtuous feedback loop as it strengthens the Apache Kafka offering, attracting more developers, who in turn further strengthen the platform, which ultimately benefits Confluent.

The company’s partnership ecosystem includes major cloud players like Amazon, Microsoft, and Google, among others. By nurturing and expanding these relationships, Confluent ensures that its software is widely distributed and supported, providing a robust channel for further growth and market penetration.

With just 38% of their total revenue coming from outside the United States, Confluent sees the international market presenting a significant opportunity for additional growth. In particular, India is a key market where the opening of a new office in Bangalore has helped scale its global presence. The country’s public cloud services market is growing at a rapid rate creating many use cases among customers.

Confluent also envisages growth into use-case-specific adjacencies that stand to benefit from applying data in motion. The company intends to tap into cross-industry adoption of use cases around machine learning, IoT, data integration and unification, real-time analytics and logistics, cloud migration, micro-services, and data sharing, as well as countless others.

Confluent has demonstrated strong momentum in revenue growth since going public, closing FY22 with total revenue of $586 million, reflecting a 51% increase year-over-year. This growth was propelled by increased sales to both existing and new customers, underpinned by a dollar-based net retention rate of just under 130%. In a particular highlight, 2022 Confluent Cloud revenue surged by more than 124% year-over-year, while customers spending more than $100k in annual recurring revenue also saw a 35% year-over-year increase. Continuing the positive trend in 2023, first-quarter revenue reached $174 million, a 38% increase year over year, with existing customers again providing solid leverage.

While improving gross margins has been a key focus for the company, Confluent’s subscription gross margin remained flat in 2022. This was primarily due to a shift in revenue mix toward Confluent Cloud, which has a lower gross margin. However, this effect was offset by economies of scale, resulting from increased efficiency and optimization of infrastructure.

Looking ahead, management’s expectations for FY23 total revenue stand at $760 to $765 million, aligning with analysts’ expectations at $763.2 million and representing year-over-year growth of 30%. Earnings per share are also forecasted to improve remarkably, going from a loss of $0.58 to a loss of just $0.17 in 2023, marking a 70% improvement.

The competitive environment for Confluent is both dynamic and multifaceted, reflecting the rapidly changing technology landscape, evolving customer needs, and constant innovation in products and services.

Confluent’s primary competition, particularly on-premise, stems from internal IT teams opting to “do it themselves” using open-source software. Yet, with the accelerating move to the cloud, competition from open-source alternatives is expected to wane as businesses increasingly favor fully-managed cloud solutions.

In the cloud arena, Confluent faces stiff competition from well-established public cloud providers such as Amazon, Microsoft, and Google, who are developing and releasing fully-managed data ingestion and data streaming products that directly challenge Confluent’s market position.

However, Confluent appears well-positioned given its emphasis on data in motion, product differentiation, and diverse offerings, its competitive advantages lie in its specialized focus, cloud-native capabilities, and ability to adapt across various customer environments, setting a strong foundation in the contested field.

Confluent’s success in the data streaming services sector has been marked by a well-defined growth strategy that capitalizes on the burgeoning demand for real-time data processing and movement. With a broad market supported by a wide and growing range of potential use cases coupled with the adoption of emerging technologies, Confluent is well-positioned to exploit significant market opportunities, pointing to a promising outlook ahead.