What will separate the winners from the losers tomorrow

Companies with more than employees use an average of SaaS applications, while companies with up to 10 employees use an average of 26 SaaS applications. Because of low levels of free cash flow across many SaaS comparables, cloud software is a sector that defies traditional discounted-cash-flow modeling.

To complicate matters, the overabundance of SaaS companies on both the public and private markets have varying key metrics, depending on their business model.

In , if the trend of the third quarter continues, the market will simplify these variables by rewarding companies that have positive and healthy EPS growth. When looking at the chart above, we see a trend favoring positive EPS has largely played out. Meanwhile, we see more confirmation that negative EPS plays a large role on the downside. Cloud software has enjoyed neck-breaking sales growth and valuations to match. Many cloud-software companies are reporting 10 to 20 times that.

Beth Kindig is a San Francisco-based technology analyst with more than a decade of experience in analyzing private and public technology companies. Kindig publishes a free newsletter on tech stocks at Beth. Technology and runs a premium research service. He exercised 2. Beth Kindig is a columnist for MarketWatch. She publishes a free newsletter on tech stocks at Beth. Home Industries Software. Opinion: How to separate the winners from the losers in cloud-software stocks for Published: Dec.

ET By Beth Kindig. Also from Beth Kindig: How to pick long-term stock winners in cloud computing Shifting sentiment Sentiment started shifting in the third quarter for SaaS companies. What That Means for the Stocks. Products Products Overview. Technology Solutions Technology Solutions Overview. Service and Support Service and Support Overview. Tesco internally valued their Dunnhumby data asset, which contained the shopping habits of some million shoppers, at over a billion dollars.

Your focus must be on maximizing your Data Capital. We define Data Capital as: Wealth in the form of value derived from organizational data. When looking at how to unlock your Data Capital, there are three challenges to overcome: Data often goes unused. Analysts estimate only. Without data consolidation, gathering and exposing it to the right users and applications requires substantial effort.

Keeping up with data growth can stifle innovation. As data grows, management overhead, infrastructure costs, and the inability to rapidly add capacity can be problematic. It is vital to optimize infrastructure and processes so you can continue innovating while keeping costs in check. Properly aligning data with organizational goals. Crossing the Data Divide No matter the industry, we will see data increasingly important to differentiating among competitors.