This article is excerpted from a letter authored by Samer Hakoura, principal at Alphyn Capital Management, based in New York.
WANdisco (UK: WAND) is set for meaningful revenue inflection in 2020 due to the recent signing of a first-party integrated engineered cloud solution with Microsoft Azure, combined with partnerships with Databricks and Neudesic who are key cloud vendors on the Azure platform.
Databricks is a provider of cloud-based analytics with a $6 billion private market value, and investments from a who’s who list of VCs as well as Microsoft. Databricks increased revenue by a factor of six and gained 5,000 customers within two years of establishing Azure Databricks as a first-party native service on Microsoft’s cloud. It achieved this with access to only a small fraction of customer data, given the difficulties of migrating large mission-critical live data sets to the cloud.
WANdisco is an Infrastructure-as-a-Service (IaaS) software company with a patent-protected method to migrate very large live datasets and keep geographically dispersed servers continuously synchronized, with guaranteed consistency, availability, and no business disruption. Microsoft has now co-engineered a first-party integration with WANdisco and is sponsoring a joint Azure-Databricks-WANdisco-Neudesic campaign directed at approximately 1,000 customers specifically to promote migration and cloud analytics.
The potential implications for WANdisco are significant. Run-rate revenues are approximately £36 million, with a credible path to over £100 million within the next two years and £300+ million beyond that, at which point the company will generate 50% operating margins. As revenue inflects, WANdisco will benefit from impressive operational leverage given its 90%+ gross margins and largely fixed costs due to a royalty-based recurring revenue business model.
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About The Author: Samer Hakoura
Prior to founding Alphyn Capital Management, Samer worked at his family's investment office in London and then managed various family investments in the Turks & Caicos which included the country's main supermarket chain, where he developed processes and systems to enable rapid expansion of the business, a waste management business that won the national recycling contract, a marina, and several real estate developments. Samer applies lessons from managing those businesses to his selection of attractive businesses in the public markets.
Samer started his career at Deutsche Bank in London, taking part in over $11 billion in M&A and financing transactions. Samer holds an MBA from the Wharton School of Business and an MCHEM from Oxford University.
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