ZUO (Zuora) is a pick and shovel of the SaaS world. The founder came out of the early days of CRM (Salesforce) and realized that the world would need a way to manage all the subscribers once SaaS became a thing.
ZUO is one of the stocks in the SaaS index that we are tracking, unless it gets acquired, which would be sad, but always a possibility…
At the time of this writing ZUO has a market cap of $3 Billion. If you believe in the longevity of SaaS, and that we will all be buying our software through subscription this stock is one to watch over the next 10 years.
But there are naturally some questions to ask…
How big can this market really become?
Will Zuora get crushed by another company?
Will SaaS as a business model turn out to be smoke and mirrors?
Will revenue really grow at 25% or more year over year for 10 years?
Will Zuora get acquired by the likes of Salesforce or Oracle? Salesforce swooped up MULE (Mule Software) when the party had only just gotten started!
Does selling software as a subscription make sense for software companies and buyers of software?
Is ZUO over valued right now? Should I wait to buy the stock until it’s cheaper?
I could write a whole blog post about each of these questions! And probably will at some point, but for know… are you scared? Or intrigued?
These are all the questions that should be floating around your head, and it’s only conviction and digging deeper into the SaaS business model which helped me come to my conclusions. What are your answers? Have you dug deep enough into the business model?
If SaaS is the future business model then it is reasonable to think that in the next 10 years ZUO becomes worth at least $30 Billion if not more.
speculator (“visionary” sounds better)