SaaS Companies and Subscription Revenue Models Every company can learn from SaaS (“Software-as-a-Service”), companies. My first exposure to SaaS companies was the first self-proclaimed “SaaS” company – Salesforce.com. This was early in my banking career around the time of Salesforce’s 2004 IPO. Today, Salesforce is a $110 Billion-plus market cap behemoth. Every company – regardless…
Cadillac‘s “BookbyCadillac” premium automobile subscription service (we refer to as AaaS), sits comfortably between the traditional car ownership model and the pure rideshare model (Uber, Lyft, Waymo). Priced at $1,500/month (plus $500 initiation fee), we don’t believe that Cadillac’s bundled subscription service is a good value – flexibility and convenience come at a price. Listen to CEORater Podcast Ep. 102 to learn more.
The Wall Street Journal published Uber’s financials.
Uber CEO Knew of Breach – Our Advice – Disclose Early
Autonomous Teaser, Uber Data Breach, More M&A
In this edition of the CEORater Podcast we cover:
1.) Autonomous driving teaser..
2.) Perhaps Microsoft (MSFT) ought to acquire Anaplan and other SaaS/cloud Financial Management tools to create an upgrade glide path for Excel? We think so. Infor would do well to follow a similar M&A path.
3.) Uber the latest company to suffer a publicized data breach. We sound like a broken record regarding the subject of Cybersecurity.
4.) Meg Whitman steps down at HPE. IT Services and Technology-Enabled Services companies would be wise to acquire Enterprise Software companies. Such acquisitions would be margin accretive, EPS accretive, would bolster valuations and perhaps most importantly would begin to move the Services vendors out of the commodity services space and into a sector where they would own IP.
CEORater Podcast Episode 80: Uber & Softbank; Augmented Reality (“AR”) in Retail
CEORater Podcast Ep. 64: Waymo Extends Lead In Autonomous Vehicle Segment:
From the Wall Street Journal:
“Autonomous cars may not need a driver, but they still need a good mechanic.
Waymo LLC, the driverless-car unit of Google parent Alphabet Inc. has signed up AutoNation Inc. to service robovans that are being tested in Arizona and California. The agreement, announced Thursday, shows the Silicon Valley tech giant is closer to deploying vehicles on public roadways without humans behind the wheel.
The agreement is separate from a June deal where Avis Budget Group Inc. agreed to park Waymo vehicles at rental lots and do routine maintenance, including oil changes, tire rotations and cleaning. AutoNation, the largest dealership chain in the U.S., will provide mechanical and cosmetic repairs to Waymo’s fleet.
Waymo is considered a leader in autonomous-car research and has been transitioning to operating a fleet of hundreds of Pacifica minivans built by Fiat Chrysler Automobiles that are retrofitted with extensive software and other gear so the vehicles can drive themselves. Waymo, which is competing with several auto makers in the driverless car race, showed off new demonstrations of its technology on Tuesday.
Auto dealers sell new and used cars but book a big chunk of their profits on financing and servicing vehicles. Many of them, including AutoNation, have been experimenting with ways to become more relevant if car usage becomes more of a shared service and people no longer need to be the primary driver of their car.
AutoNation has begun servicing self-driving vehicles in the Phoenix area, where Waymo has launched a program that gives hundreds residents free rides in the self-driving cars. Mike Jackson, AutoNation’s chief executive, said he has been making regular visits to Waymo headquarters and realized his dealership group could have a role in the commercialization of self-driving vehicles.
“We’re able to put in place the strategic maintenance and care program for each vehicle that will proactively make sure it’s always operating at the highest safety levels and will optimize the life cycle of the vehicle,” Mr. Jackson said in an interview.
In a statement, Waymo Chief Executive John Krafcik said the two companies have “a shared vision of enhancing the in-car experience” and AutoNation will help to ensure “Waymo vehicles are always in top condition as we bring fully self-driving cars to the public.”
“This is additional business for us,” said Mr. Jackson. “I believe Waymo is going to grow—I think they have the right approach and we’re going to grow with them.”
AutoNation said its technicians have the expertise to maintain and repair the vehicles but as the partnership grows, they will hire more technicians to meet demand.
The Waymo deal is a part of a broader AutoNation effort to reduce its dependence on low-margin new car sales. In the last quarter, it opened “AutoNation USA” used-car centers and expanded into branded car parts, auctions and collision centers.
Separately, AutoNation said its quarterly net income from continuing operations fell 9.5% from a year earlier to $1.00 a share, beating analysts’ expectations by 16 cents. Revenue fell 2.7% to $3.2 billion.
Same store used-vehicle gross profit was up 9% from a year earlier.”
Uber’s corporate governance – or lackthereof – is a hurdle in consumating a deal with Softbank. We are not fans of entrenched founders and out-sized voting stakes.