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.
Members, log in below to access the restricted content.
Not a member?
Thank you for your interest. Please note that MOI Global is closed to new members at this time. If you would like to join the waiting list, complete the following form:
Disclaimer: The description herein of the approach of Alphyn Capital Management, LLC and the targeted characteristics of its strategies and investments is based on current expectations and should not be considered definitive or a guarantee that the approaches, strategies, and investment portfolio will, in fact, possess these characteristics. Performance results of the model portfolio are presented for information purposes only and reflect the impact that material economic and market factors had on the manager’s decision-making process. No representation is being made that any investor or portfolio will or is likely to achieve profits or losses similar to those shown. Results are net of all standard fees calculated at the highest rate charged, expenses and estimated incentive allocation. Model portfolio returns are inclusive of the reinvestment of dividends and other earnings, including income from new issues. The return is based on annual returns since inception and does not give effect to high water marks, if any. Returns may vary for investors who are restricted from participating in new issues. There is no assurance that any of the securities discussed herein will remain in an account’s portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed do not represent an account’s entire portfolio and, in the aggregate, may represent only a small percentage of an account’s portfolio holdings. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein. The graphs, charts and other visual aids are provided for informational purposes only. None of these graphs, charts or visual aids can and of themselves be used to make investment decisions. No representation is made that these will assist any person in making investment decisions and no graph, chart or other visual aid can capture all factors and variables required in making such decisions. This report is for informational purposes only and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy or investment product. Our research for this report is based on current public information that we consider reliable, but we do not represent that the research or the report is accurate or complete, and it should not be relied on as such. Our views and opinions expressed in this report are current as of the date of this report and are subject to change. Any reproduction or other distribution of this material in whole or in part without the prior written consent of Alphyn Capital Management, LLC is prohibited.