Who's the newest member of the SaaS class?

Updated On: October 28, 2019
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Today, we welcome the newest member of the SaaS class: Citrix. Plus, we spy acquisition upon acquisition. 

 

 

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Welcome to the SaaS class, Citrix

I hear we have a new neighbor in the subscription space—Citrix, a company comprised of digital workspace aiming to transform how you work.

Citrix plans to shift to a subscription business model and software-as-a-service, as the company recently showed strength in its Workplace subscriptions. CEO David Henshall said that the Citrix business is shifting to subscriptions ahead of expectations. Wall Street was expecting Citrix to report third quarter non-GAAP earnings of $1.25 a share on revenue of over $715 million. Citrix said that subscription revenue growth of 43% in the quarter offset a decline of 23% for perpetual product and license revenue. 

But we are not surprised. Zuora reminds us that the subscription universe has grown more than 300% in the last seven years. Public markets value the revenue of companies with a subscription-model 2 to 3x higher than those with a one-time, transactional sales model.

“Digital transformation” is a boardroom-level imperative at leading global corporates. And yet, with all this change, we are only just beginning to realize how massive this shift is.

Per usual, Zuora’s Tien Tzuo says it well.

"The epiphany for us is to say: That shift to subscription is using the power of a very different business model to change the vendor-customer dynamic."

Welcome to the club, Citrix.

 

Roku x dataxu

We’re seeing Roku buy adtech platform dataxu for $150 million.

Roku—streaming players and smart TV—is beefing up its advertising business with the acquisition of Boston-based dataxu, a demand-side platform that will allow marketers to plan, buy, and optimize their video ad campaigns that run on Roku’s devices and services.

Welcome, neighbors.

Adding dataxu to its resume will allow Roku to provide advertisers with a data-driven solution they can use to plan and buy their ad spend across Roku’s platform.

And we know the market for over-the-top advertising will continue to expand as the streaming wars continue. Because according to Roku CEO Anthony Wood:

“TV advertising is shifting toward OTT and a data-driven model focused on business outcomes for brands.”

We remember the good old days, when Roku was just a newbie to the subscription space.

Just look at them now.

 

Mastercard x SessionM

“Consumers’ expectations about their experiences with brands are changing.”

This is the sentiment Francis Hondal put out just a few days ago, president of loyalty and engagement at Mastercard.

So to pivot with the times, what did Mastercard do? Acquired SessionM.

Mastercard believes the future of loyalty needs to be re-imagined to enable seamless digital experiences, and they view SessionM’s consumer-centric capabilities as a way for them to broaden their value to marketers across sectors.

SessionM—another ProfitWell neighbor—is a customer data and loyalty platform, which unifies your customer data, delivers personalized omnichannel experiences, and increases LTV and customer loyals.

This is huge for the two of them.

And we know, loyalty programs are a crucial way to help customers feel valued and wanted. It’s likely to help persuade them to stick around, particularly if your market competition is strong and you’re at risk of being undercut financially or while you’re working on feature updates.
Incentivizing is particularly important in preventing customers who may have unsatisfied needs, from churning immediately. Incentives can buy you time while you fix performance issues or expand your service.

“SessionM shares Mastercard’s commitment to creating experiences that drive lasting loyalty and meaningful, impactful customer engagement... They’re joining the Mastercard crew to bring innovative technology to more users in more places around the globe." —Lars Albright, Co-Founder and CEO of SessionM


 

ProfitWell Book Club: Subscribed


Subscription software, subscription media, subscription pickles.

You name it, and out there somewhere there’s a recurring revenue business for it. The subscription model is no doubt dominating the world and turning the traditional business model on its head. On today’s ProfitWell Book Club, I dive deep into Subscribed, written by Zuora’s CEO Tien Tzuo—who argues the subscription model is revolutionizing our future, and how to start implementing it the right way. 


And that’s a wrap for your October 28 subscription news. Recruit your teammates into the subscription know: recurnow.com to sign up for episodes on the daily.

If you have news to share, hit me up at abby@recurnow.com and we'll collaborate.

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