Wall Street analysts asked big enterprises how their cloud spending could change next year, and there’s good and bad news for Salesforce, ServiceNow, SAP, Slack, Oracle, Splunk, and VMware

Marc Benioff

Summary List Placement

The coronavirus crisis is pushing businesses, including big corporations, to embrace the cloud faster.

That’s great news for cloud software giants, although major vendors have had to navigate a fast-changing market that has emerged from the crisis and the sudden shift to remote work.

During a virtual event last week, UBS analysts asked top executives from major corporations, including four Fortune 500 companies, on how they expect enterprise tech spending to change next year, according to a note sent to clients on Monday.

The virtual discussion held last week and summed up in the note focused mainly on the big three cloud providers — Amazon Web Services, Microsoft and Google — as well as the big enterprise software vendors. The note doesn’t name which companies UBS analysts spoke to. 

What the analysts heard, however, offered important insights into what major cloud software companies Salesforce, ServiceNow, Oracle, VMware, Slack, and Splunk can expect in 2021 based on the insights of big enterprises.

Here’s the good and bad news for Salesforce, ServiceNow, Slack, Oracle, VMware and Workday:

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Salesforce has done well during the pandemic thus far. After initially cutting its full year guidance in May from $21 billion down to $20 billion, it still reported $5.15 billion in revenue in Q2, beating analyst estimates. It also raised its annual revenue guidance slightly, forecasting $20.7 to $20.8 billion.

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Customers that UBS spoke with had varied thoughts on continued IT spend on Salesforce in 2021. One customer said they’re still seeing usage increase. However, another customer had a different take, saying Salesforce was suffering from a “lack of innovation” that could hinder its growth. 

“Among Salesforce’s major product segments, they’re most vulnerable in the Marketing Cloud, where emerging firms such as Twilio (more so with its acquisition of CDP vendor Segment) are positioned to chip away at Salesforce’s business,” UBS analysts wrote. 


ServiceNow, whose platform automates clients’ workflows and operations, blew past Wall Street’s expectations when it reported results two weeks ago. 

ServiceNow’s results “were about as clean as they come and should help to restore confidence in the stocks of the better-positioned SaaS firms,” UBS analyst Karl Keirstead told investors in a note after the company’s report.

And there’s more good news from the UBS survey for the Silicon Valley software giant, which got upbeat reviews from the big corporations.

The four Fortune 500 companies the Wall Street firm spoke with all use ServiceNow. “Two cited plans to increase spending in 2021, citing plans to ‘expand into other areas,'” the UBS analysts wrote. 



Slack has seen its usage and demand grow this year as remote work became the norm for many companies for the foreseeable future. The work chat app’s growth however, can’t compare to that of Zoom, which reported 355% revenue growth during its second quarter earnings. Slack grew 49%, …read more

Source:: Businessinsider – Tech


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