Most people buy their software from companies like Salesforce, Okta, Box, Dropbox, DocuSign, Workday, ServiceNow and so many more, which manage it for them and provide updates on a regular basis automatically. According to data from Synergy Research, the entire cloud ecosystem grew 25% in the first half this year to $235 billion. The cloud ecosystem consists of three main elements - infrastructure, platform and software - all delivered as a service, as they say. The question is why investors can’t understand this and connect it to the short- and long-term performance of a given SaaS stock. It is in fact, the future of work, the future of computing, and anything that’s not digitized now will be sooner than later. It is not some pandemic-driven flash in the pan. I’m not here to give financial advice, but I can tell you that digital tooling is not going away. The same analysts who fawn over a stock one month dump it the next when the growth projection is suddenly smaller (and much more realistic), knowing full well no company can maintain the pandemic numbers we were seeing. There is this persistent notion among investors that stocks that did well during the pandemic like Zoom, DocuSign and Okta will suddenly fade from our minds as soon as the pandemic subsides (if that ever happens). Sometimes I wonder if the analysts on Wall Street, who I’m sure are smart people, understand how the technology industry works.
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