- Big technology companies are expected to be looking to make acquisitions as the coronavirus crisis drives down valuations.
- Domo, a Utah-based data-analytics company, is perhaps the most likely acquisition target in the current environment, according to analysts: "Domo is one of those companies that it's kind of surprising that it hasn't been acquired yet," Valoir's Rebecca Wettemann told Business Insider.
- Domo, valued at around $416 million, is the kind of business that appears to be most attractive to big cloud players right now, following Salesforce's acquisition of Tableau and Google's acquisition of Looker — both major competitors to Domo.
- The coronavirus crisis appears to be putting pressure on Domo. The company this week , or , according to local media reports, and a recent Morgan Stanley report said the crisis has magnified "existing sales execution issues" for companies including Domo.
- "While our business is showing resiliency and the crisis is actually highlighting the importance of our product, there is so much uncertainty ahead and we needed to ensure that we keep ourselves in a position to protect our business and continue to serve customers for the long term," Domo CEO Josh James said in a statement on the layoffs.
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2020欧洲杯夺冠热门Over the last few weeks, Business Insider has been talking to experts to see which companies they thought would get bought up as the coronavirus crisis drives down valuations — and thus, potential purchase prices. In our conversations, one name kept coming up: Domo, the Utah-based data analytics company.
2020欧洲杯夺冠热门"Domo is one of those companies that it's kind of surprising that it hasn't been acquired yet," Valoir analyst Rebecca Wettemann told Business Insider. "Because it ticks all the boxes for cloud analytics: easily adoptable, high usability, that whole low-code-no-code potential. It's so good at so many things. Domo has a lot to offer."
2020欧洲杯夺冠热门Domo builds a cloud-based business intelligence and analytics platform that helps executives see important information about the health of their company through real-time dashboards. It's the kind of business that appears to be most attractive to cloud giants, as two of Domo's highest-profile rivals both got snapped up.
In the last year alone, Google acquired data-analytics company Looker for $2.6 billion, and Salesforce bought data visualization company Tableau for $15.7 billion. Domo's market cap at the time of this writing is around $416 million — well below the valuation of over $2 billion it commanded as a private company, before its tumultous 2018 IPO.
Nucleus Research analyst Daniel Elman told Business Insider that Domo's stock seems undervalued and, after the Looker and Tableau acquisitions, "it stands to reason another large player could swoop Domo up for pennies on the dollar to bolster their own analytics capabilities."
Coronavirus crisis puts pressure on Domo
The coronavirus crisis appears to be putting pressure on Domo's business. The company this week , or , according to local media reports. A recent Morgan Stanley report list Domo among companies for which the coronavirus crisis has magnified "existing sales execution issues."
Domo did not comment on the Morgan Stanley report or the speculation from analyst that it's likely to be acquired, but Domo CEO Josh James in a statement to Business Insider said the layoffs are part of a $30 billion restructuring plan that also included cuts to executive pay and perks, marketing expenses, and "non-essential expenses unless they pertain to keeping and protecting our employees, retaining and serving our customers, or winning new contracts in the short term."
2020欧洲杯夺冠热门"While our business is showing resiliency and the crisis is actually highlighting the importance of our product, there is so much uncertainty ahead and we needed to ensure that we keep ourselves in a position to protect our business and continue to serve customers for the long term," James said. "Parting ways with people who have become part of the fabric of the company, particularly in an environment like this one, is incredibly difficult. With the economy as a whole slowing down, we can't be in a position where we come close to running out of money."
Could be a good fit at Microsoft or Oracle
It's unclear whether these developments would affect the likelihood that Domo gets snapped up in an acquisitions, but analysts said, in general the company could be an attractive acquisition for major enterprise players such as Microsoft and Oracle.
2020欧洲杯夺冠热门Ray Wang of Constellation Research also called Domo an "awesome" business intelligence and data visualization technology. He said Microsoft may decide to go after Domo to beef up the capabilities of Power BI.
2020欧洲杯夺冠热门"What they would then do is invite them to partner with them and they would spend the next two to three years to figure out if they could build this, or do they have to buy Domo," he said.
Data analytics visualization is clearly a hot space in cloud software after the Looker and Tableau acquisitions. However, Valoir's Wettemann said that Domo is struggling with the perception that its technology isn't up to par for larger enterprise customers.
"The downside is it almost got bucketed into the sort of Dropbox category, stuff that's so usable and consumer-focused that people ask, is this really an enterprise app?," she said. "And I would argue it is. The challenge is they got lumped into that bucket with Dropbox and it's been kind of challenging to break out of that."
The company has also been somewhat controversial. The company went public in 2018. An investor watchdog at the time said "investors should stay away from this IPO" due to a series of what he saw as red flags. Leading up to the IPO, Business Insider reporter Julie Bort wrote extensively about issues within the company, according to insiders.
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