A Wall Street Transcript Interview with Alex Zukin, a Research Analyst Covering the Enterprise Software as a Service Segment for Stephens Inc.: Cloud Computer Service Industry Just Beginning Its Growth Phase

Wall Street Transcript

67 WALL STREET, New York - June 11, 2014 - The Wall Street Transcript has just published its Business and Application Software Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Cloud Computing Secular Trends - Application Software Consolidation Activity - Cloud Computing and SaaS Trends - Larger IT Systems Upgrades - B2B Recovery - Paradigm Shifts in Software - Software-Defined Data Centers - Business Services Capex Spending

Companies include: Salesforce.com (CRM), NetSuite, Inc. (N), Callidus Software Inc. (CALD) and many others.

In the following excerpt from the Business and Application Software Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Your coverage is enterprise software as a service. Can you explain what that means?

Mr. Zukin: Effectively it is enterprise software companies. They are companies that make applications that enterprises use. The companies I cover are primarily cloud companies. You don't have to buy the application and install it yourself. You have to access it online or through your mobile device.

TWST: You mentioned the cloud. Has the expansion of the cloud created a major change in the space?

Mr. Zukin: There are a lot of aspects of enterprise software that historically had been very complex, and as a result you haven't gotten the bang for your buck that you were expecting to get. The cloud has simplified the value proposition such that you pay me and I deliver on what I said I was going to deliver. So it's a lot cleaner.

The reason that the shift has accelerated is there is a higher degree of comfort with the security and the reliability aspect of putting your systems in the cloud and your data in the cloud. That was a pretty large gating factor for a long time, particularly for large enterprise adoption, but I think that you have seen that shift, and I think you are going to continue with the concept that the employees in the enterprise want to have the same type of look and feel for products that historically they have only had as a consumer - this consumerization of IT notion. I think you are going to see it continue, because now the commitments that these vendors are making to their customers is we are going to continuously provide you with a higher quality of service that we're going to continue to innovate.

There is a definite need for agility. You don't have the luxury of waiting and waiting and waiting until the stuff that you bought actually works, because you need it to work now. You need it to work yesterday in order to get you to the numbers that you want to be able to hit to deliver the value that you want to provide.

TWST: Is the shift to the cloud by enterprise software companies basically complete at this point?

Mr. Zukin: Companies are definitely using the cloud more and more, but the shift is still ongoing. You have different levels of comfort and different kinds of cloud for different industries that have varying degrees of regulation. So we're still very much in the earliest innings, but we're not in the late innings of this transition by any stretch...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

View Comments (0)