00:00 Speaker A
So, John, it sounds like, um, maybe the SASpocalypse isn’t done, it’s just on pause because eventually, I mean, you know, the stocks re-rated obviously. So they’re now pricing in a more negative outcome. But it really sounds like from what you’re saying, you think there are going to be survivors and ones that don’t survive or at the very least, a clear delineation between winners and losers.
00:23 John
I think it’s more the delineation between winners and losers. They’ll they’ll survive. I mean, Salesforce has this huge system of record, a lot of customers, um, that pay them and they have their data for like 20 years or more. Um, so they’re going to survive, but I think it’ll be a little bit like, I think a a a fair analogy is CA. So for some of your um watchers here that remember back then Computer associates was a company, they were a mainframe software company in the late 90s. They did a great job. They were a leader. They consolidated the industry and then they tried to move into client server and then later cloud. Well, I started covering CA in 1999. They were the fourth largest software company in the world and they had $4 billion in revenue. Roll forward 20 years to 2018, they had $4 billion in revenue. And their relevance, they were still relevant. They still had $4 billion in revenue and they had a lot more cash flow. But their relevance in the world had waned or it just stopped growing. And and they got taken out by uh Broadcom at a little over five times recurring revenue. And as I pointed out, Salesforce trading on four times. So, and they are growing a little bit. Um not a lot, but they’re growing a little bit. So, um, I think there will be CAs out there, but there will also be azure. People that can adjust, but you need sort of an innovative D DNA to do that and not just marketing, which is what Salesforce leads with.