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Disruptive Influences: 20 Tech Companies to Watch

In areas from cyber defense to tax compliance to database management, these 20 companies are changing how businesses operate.
CFO StaffApril 6, 2017
Disruptive Influences: 20 Tech Companies to Watch

Venture capital money is flowing freely. Cloud infrastructure is enabling startup companies to operate on scant fixed investment. Next-generation technologies are promising to revolutionize business processes. In many ways, it is a boon time for enterprise technology.

But for finance chiefs trying to pick their way through whitepapers, conferences, product pitches, and webinars, the array of products and vendors can be dizzying. And new companies pop up continually, making it difficult to keep up with the latest and greatest.

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To give CFOs a sense of the exciting tech developments going on, as well as alert them to innovative solutions, the editors of CFO decided to filter the marketing noise generated by tech firms. The goal was to produce a short list of promising companies and applications geared toward the next-generation enterprise. Since CFOs have a large hand in technology adoption, we considered solutions for finance as well as other parts of the organization.

The result is our first-ever list of 20 tech companies to watch, determined solely by the editorial team. Why did we select the companies on the following pages? We think they offer compelling products that address definable pain points in many businesses, and while many of these vendors are privately held, they look to be formidable players in their categories.

In choosing a company, the editors do not vouch for the quality, cost-effectiveness, or reliability of its products—that level of analysis is beyond our technological capabilities. Instead, we are indicating that the solution or product category chosen deserves a CFO’s attention and warrants further research. We are also suggesting that, if one of these company names shows up on a manager’s expense report or a business unit’s budget, a CFO would be smart to explore whether the solution can provide value to other parts of the organization.

Plenty of other companies could have made our list, but for better or worse, the ones on the following pages are those we deem worthy of examination in 2017.

The profiles were written by deputy editors David M. Katz and David McCann, web editor Sean Allocca, and editor-in-chief Vincent Ryan.

Unhappy customers, goods that sit idle in warehouses, visits from revenue auditors, class-action lawsuits—those are the dangers of calculating sales and other indirect taxes incorrectly. But keeping track of all the changes from thousands of state and local, as well as international, tax jurisdictions to collect and pay the accurate amount is time-consuming and complicated.

Enter Avalara and its products that simplify sales tax compliance. The Avalara solution sits within a customer’s financial, billing, e-commerce, or point-of-sale system and delivers tax calculations in real time over the Internet. It validates the physical transaction address and uses geolocation technology to calculate the tax. Avalara does this for U.S. sales taxes, the goods and services taxes (GST) in Canada and other countries, value-added taxes (VAT), and excise taxes.

“We capture all the complexity and variations across countries and U.S. states, and we’ve implemented into software code a range of different taxes and made it simple and affordable,” says Richard Asquith, Avalara’s vice president of global indirect tax.

17Apr_TechCos_AvalaraWhat Avalara does well—accuracy combined with speed—is becoming crucial in the indirect tax arena. “The days of submitting a U.S. sales tax or VAT return months after doing a transaction, which allows lots of time to rethink everything, get the calculations right, and consult counsel, are coming to an end,” says Asquith. “Through digitization, taxing authorities are able to peer into transactions through live feeds from ERP and accounting systems.”

Using analytics, revenue auditors can check the calculations of tax rates and reconcile those to tax receipts, Asquith says. “We’re starting to see tax audits where the tax authorities know more than the CFO, because the authorities have the comparable matching transactions from throughout the supply chain.”

Internationally, this is happening in various forms in China, Brazil, Spain, and Poland, and is starting to arrive in the United States, Asquith adds.

Another pressing issue Avalara addresses for companies is cross-border e-commerce sales. Businesses selling into another state or foreign country to a consumer often have to pay customs duties or local sales or import taxes. But if the e-commerce provider doesn’t calculate and settle the tax before the product ships, the delivery service has to collect the tax from the customer. Asquith calls it a “choke point” for small firms selling goods online. “Our Landed Cost product is one of our fastest-growing products at the moment,” says Asquith.

Besides providing tools for calculating, reporting, and filing, Avalara advises companies on whether they have a “nexus,” and therefore a tax obligation, in a particular state. “Companies going national or global can choose to license our software or employ our tax teams and outsource tax compliance,” Asquith says.

How does Avalara keep up with about 10,000 U.S. taxing jurisdictions and tax rules in 200 countries? Avalara has tax accountants and tax lawyers scouring tax authority websites for updates and publications, researching court cases, and staying alert for legislative changes.

In addition, since its founding in 2004, Avalara has acquired 17 companies, many of which specialize in tax compliance for specific localities and industries. The company landed $96 million in funding in 2016, so it may continue to roll up other providers of tax compliance engines. An initial public offering may also be on the horizon.

“Having to maintain all the records and reports needed for filing returns was a headache we no longer have,” writes one user of Avalara’s products on the G2 Crowd peer-to-peer software review forum. “We have freed up at least 50 hours per month that we now put to better use.” —Vincent Ryan

Automation Anywhere
In a global business environment where companies are fixated on automation and grow more so by the day, a software vendor could certainly choose a worse name than Automation Anywhere.

There is such a company, and it has a lot more going for it than its name. Automation Anywhere is the clear market leader in the burgeoning field of robotic process automation (RPA), and 2017 is shaping up as a year when demand for RPA could explode.

Automation Anywhere counts 27 channel partnerships that generate about 50% of its revenue, but it didn’t get where it is via crafty marketing. Forrester Research ranks it first, among many strong competitors, in both the strength of its product and the strength of its overall strategy.

Everest Group, another analyst firm, recently identified the company as one of two RPA players that are market leaders and “star performers” in a matrix evaluation of vendors’ product features, implementation quality, and impact on the market.

17Apr_TechCos_AutomationAnywhereThere’s no doubt the company has had an impact: Automation Anywhere says it has more than 500 enterprise clients worldwide and that it experienced net growth of 167 customers in 2016.

Like other RPA vendors, it sells robotics software designed to automatically replicate keystrokes that humans make to complete back-office processes. In the case of Automation Anywhere, such processes include procure-to-pay, quote-to-cash, human resources administration, and claims processing.

But Automation Anywhere works in the front office too, with “good depth” in call-center and other customer-service environments, where humans interact with bots, according to Forrester analyst Craig Le Clair.

In fact, Le Clair says that’s the single thing that most distinguishes the company from its competition. “Most of these companies specialized in or evolved from either the back office or front office, but Automation Anywhere has struck a balance,” he says.

The company is also balanced across several important RPA performance categories, including strength in desktop integration and in the analytics that drive reporting capabilities, Le Clair says. He adds that Automation Anywhere “has a good road map for analytics in the future.”

CEO Mihir Shukla refers to the company’s mission as building a global “digital workforce.” He says Automation Anywhere has deployed 450,000 bots to date and is aiming to have 3 million placed by 2020.

That kind of growth augurs a potential transformation for companies’ decisions on where to locate operations. “The interesting thing about the digital workforce is that it’s geography-neutral—once it happens anywhere, it can happen everywhere,” Shukla tells CFO.

Shukla talks frequently about instilling cognitive capabilities and artificial intelligence into the company’s products, but at present those initiatives are in their early stages.

The company recently released a capability called IQ Bot, which offers machine learning—that is, the technology continually monitors the keystrokes humans make to complete processes and thereby improves bot performance without the need for additional programming by humans.

But to many observers, that’s not artificial intelligence. “All RPA today is what I call obtuse RPA,” says Le Clair. “It handles dumb tasks, there’s no decision-making, and the rules are static.”

But Le Clair suggests that AI will arrive in the RPA space within two or three years. “It will allow bots to handle advanced exceptions, making decisions about taking one path or another,” he says. —David McCann

With President Donald Trump’s executive order requiring federal agencies to cut two regulations for every one they issue and with at least three regulatory reform bills launched in Congress, slashing governmental red tape is very much the rage. The many executives who have long complained about regulations’ stranglehold on their businesses apparently have a good chance of getting their way.

Yet for other companies, new rules and standards aren’t such a bad thing—in fact, they might provide ample fuel for growth. FinancialForce, an enterprise resource planning vendor with apps that sprouted from the cloud-based platform of Salesforce, is a case in point.

FinancialForce expects a big sales boost from the new revenue recognition reporting standard that will go into effect over the next few years. “From a business perspective, it’s frankly a boon to us,” says CFO John Bonney.

Public companies are hustling to comply with the complicated standard, which they must start applying to reporting periods beginning after December 15, 2017.

17Apr_TechCos_FinancialForceThat deadline puts FinancialForce in the catbird seat, Bonney thinks. Under the standard, companies must match a range of performance obligations to revenue. “You can’t charge somebody $0 for a widget and $100 for the services [enabled by the widget] and pretend that the widget doesn’t have any revenue,” the CFO says.

Many companies today have multi-element revenue arrangements, including both products and services, that include different kinds of billing for each element. Bonney contends that the firm’s billing and revenue recognition software “allows users to isolate each element of the relationship they have” with clients to make it easier to comply with the new standard.

Thus, the firm is currently seeing its greatest demand for and growth in its revenue management and recognition apps, according to Bonney.

Aiming to automate the administrative functions of health care, real estate, management consulting, and other professional services organizations, the vendor’s offerings also include accounting and finance, spending, inventory, and talent management tools.

Overall, FinancialForce is growing strongly, according to a vendor profile by IDC. “The company has consistently been in the top five of growing technology vendors in the ERP market,” according to the report, which noted that FinancialForce has more than 650 employees worldwide, as well as 1,300 customers.

Late last year, FinancialForce reported that it expected to reach a run rate of $100 million in revenue early in 2017. Asserting that the company is growing just north of 40% a year in revenue, Bonney notes that it’s at an inflection point. That means FinancialForce must ramp up to meet its next goal: becoming a $1 billion company.

FinancialForce will face obstacles on the way to its next milestone. The main challenge is that it is still a relatively young company, according to IDC. Although “the team is adding functionality to its solutions very quickly, it has very stiff competition as it seeks to win over enterprise customers.”

In competing for such high-end business, FinancialForce “will need to cater to a wide variety of localities and regulatory environments and eventually forge partnerships outside the Salesforce platform,” according to the profile.

That’s a lot to ask of a firm with fewer than 1,000 employees, IDC acknowledges. But FinancialForce’s recent success “proves that the company is on the right track.” —David M. Katz

Sprinklr thinks it knows what the future looks like. The company is trying to spark an evolution in customer relationship management by collecting and leveraging social-media data alongside traditional CRM information. Imagine a system like Salesforce that also collects data about customers from their tweets and Facebook posts.

Sprinklr manages more than 4 billion social connections in 150 countries and mines some two dozen social media channels for information about clients’ individual customers. Sprinklr incorporates that data directly into a client’s existing CRM system. The company co-exists with industry Goliaths, like Salesforce and products from Adobe and Oracle, and provides extra value for businesses that are looking to include social media in their advertising and marketing campaigns.

With more than 1,300 employees in 14 offices worldwide, the six-year-old company now lists 9 of the world’s 10 most valuable global brands as clients, including the likes of Nike, McDonald’s, and Microsoft. Annualized recurring revenue hit the $100 million mark in 2015, up 150% from the prior period.

“We’re in a very interesting space,” says Carlos Dominguez, Sprinklr president and COO. While the “big players” already supply CRM systems, “they really don’t do social.”

17Apr_TechCos_SprinklrThe social media management platform mines posts on well-known channels, from Facebook to LinkedIn to the European social media service VK. Dominguez says clients can use the information to do things such as reach out to customers with highly targeted email campaigns or provide a more personalized experience when customers call company help lines. In one example, a customer called Nike inquiring about a pair of shoes that hadn’t been delivered on time. The agent quickly used social networking information from Sprinklr to learn that the woman was running in an upcoming marathon. The agent took the opportunity to sell her additional merchandise. Dominguez says the $200 pair of running shoes turned into a $400 purchase.

In July, the company raised $105 million in funding led by the Singapore-based investment firm Temasek. The capital might be used to help feed Sprinklr’s healthy merger appetite. The company has acquired 11 businesses to date, 10 in the past two years alone. The laundry list of tech start-ups includes Postano, a social media visualization platform, and Little Bird, an audience insight company. Sprinklr has raised $239 million in funding and is currently valued at $1.8 billion.

In addition, Sprinklr rewrote the code for these acquired technologies from scratch, meaning clients can spend less time integrating applications or worrying about customer service, thus saving time and money, Dominguez says. The most recent acquisitions allow Sprinklr to tailor its services to some of its most prominent clients. Little Bird, for example, helps brands discover top influencers who can promote a company by word of mouth.

As for the future, business spending on social media is expected to reach $27.4 billion by 2020, according to Forrester Research. That includes in-feed and out-of-feed ads on social networks as well as agency fees and technology spending. If that market projection proves accurate, it represents a 122% surge from the $12.3 billion spent in 2015. Until then, Sprinklr is patiently waiting.

“Our greatest risk is that we’re looking at the world in a future-backwards way,” Dominguez says. Although Sprinklr already calls half of all Fortune 50 companies clients, there remains a learning curve when teaching prospective patrons the value of leveraging social data. In fact, many companies are just not ready to take the plunge.

“We spend an inordinate amount of time educating and showing folks what the new world will look like,” Dominguez says. “We know where the future is and we’re helping clients get there.” —Sean Allocca

Most vendors of IT management services focus mainly on “things” that by now are considered at least a generation or more old: desktop computers, laptops, cell phones, and servers.

Oomnitza, which raised a modest $2.3 million of funding in 2014 and since then has grown quickly, has a software-as-a-service subscription offering flexible enough to manage a lot more than laptops and cell phones: its product manages the sensors and other new-age capital equipment that make up the Internet of Things.

One Oomnitza client, for example, provides geospatial information tools; Oomnitza manages its lidar (Light Detection and Ranging) aerial mapping systems. Another customer offers turnkey systems for outfitting trade shows with equipment. Oomnitza also manages prototype self-driving cars for an automaker, and Internet-powered information kiosks for a city government. It even works with a major brewer that installs sensors in its kegs, taps, and refrigeration units.

How can a software program be that flexible? “A server, a self-driving car, and lidar equipment seem very different from the outside,” says Oomnitza CEO Arthur Lozinski. “But when you think about managing them they are quite similar, because they go through similar steps.”

17Apr_TechCos_OomnitzaThat’s a reference to the essence of IT asset management. Oomnitza’s software tracks the lifecycle of those devices and objects—from the time they’re budgeted pre-purchase, all the way to archiving the data generated by obsolete assets earmarked for destruction.

The software allows customers to track where assets are, who has control of them, whether they’re working or need maintenance, and so on. The software also allows users to run reports on any of those variables.

Oomnitza started serving its first 10 customers in 2014. It landed them through cold-calling. “Our first customer management system consisted of printed-out company logos along with the names of the CIOs and IT managers we wanted to talk to at those companies,” says Lozinski. “Six months later we had an entire wall covered with logos of customers we had signed on.”

The company has done no marketing to date, and no analysts have written reports on it. It relies on a proactive sales approach and word of mouth. “Lots of people come to us because they have a friend at a company that uses us, or they used us at a previous company,” the CEO says.

While Oomnitza has moved far beyond simply tracking computers and cell phones, its success in that area is a harbinger of continued broader growth. “Somehow they cracked the code on how to handle those devices and made it easy for companies to manage the assets,” says Timothy Chou, a former Oracle executive who teaches cloud computing at Stanford University. (He also owns shares in Oomnitza and is a frequent contributor to CFO.)

“And,” Chou continues, “many future [technologies] will consist of a bunch of sensors and actuators with cell-phone-like technology sitting in the middle. The reason I say that is, just look at a cell phone: it’s a computer that has maybe a dozen sensors and it already connects to three networks—Bluetooth, 3G or 4G, and WiFi.”

Given that General Electric, for example, has poured more than $1 billion into developing an IoT management business, why should we pay attention to a small, young company like Oomnitza? Because such companies often bring a new way of looking at business and create disruptive technology.

“If only large players could enter markets,” Chou says, “Google wouldn’t exist. Microsoft had way more money and engineers than everyone else. Oomnitza has built modern software from the ground up that offers unique advantages in flexibility and ease of deployment.” —D.M.

The only publicly held company in CFO’s tech watchlist, Workiva has products that are as essential to the offices of the CFO and the controller as oxygen is.

The company’s Wdesk cloud-based platform features proprietary word processing, spreadsheet, and presentation applications built on top of a data management engine. But don’t mistake Wdesk for a desktop application suite, because it’s in a whole other league. The platform offers synchronized data, controlled collaboration, granular permissions, and a full audit trail. Companies trust it for reporting to the Securities and Exchange Commission, managing audits, and complying with Sarbanes-Oxley.

Stuart Miller, CFO of Workiva, points to what differentiates the platform: it’s “massively collaborative” (several hundred people can work on the same document); it has a full audit trail (changes are perpetually time-stamped); and it features a live-linking capability, around which Workiva has built a patent.

17Apr_TechCos_Workiva“I can open up my [earnings] press release, my script for the [earnings] call, and my board presentation and see numbers that are all driven by the same spreadsheet, and they are linked,” Miller says. “If I change a number in the spreadsheet it changes in all the other documents. It reduces ticking and tying and the chance of making an error.”

Miller says CFOs like that Workiva’s platform “brings order to the chaos” of financial reporting, but the people who really “feel the pain” and thus understand the complete benefits of the platform are the finance and compliance team members assembling the reports. Workiva started its business by calling on business users and allowing them to sign quarterly contracts. But once several groups within an organization adopt Wdesk, its IT department contacts Workiva. “The message from IT is that you need to improve your user management so I can add thousands of people instead of hundreds,” Miller says.

Once Workiva is deployed, companies are saving money through lower costs of compliance. According to a Forrester Research case study, a large auto parts retailer using the Wdesk SOX solution to streamline its monitoring and testing of internal controls slashed the time to finalize a control from two weeks to two days and saved 240 hours annually on SOX certifications. The net present value per user over a three-year horizon was more than $6,000.

Miller says Workiva has a 50% market share among accelerated SEC filers. It also has 480 customers for its SOX product. While Workiva started out in 2008 taking business from financial printers, its ambitions are broader now. It is being adopted by customers for auditing, risk and compliance (including Dodd-Frank stress testing), and operations (managing and tracking key performance indicators). For auditing, finance teams use the workflow capability for task assignments and a digital support binder to attach substantiating documents for auditors.

Workiva is also working on a data application programming interface to enterprise resource planning systems. “If you run analytics outside of ERP, you have to get that data out. Companies have been dumping it into Excel spreadsheets, but the data is too large for Excel spreadsheets,” says Miller, forcing companies to export it piecemeal and reassemble it. Workiva’s API will allow users to dump an entire trial balance into the Wdesk cloud-based spreadsheet.

Workiva spends about 30% of revenue on R&D, but it’s also trying to meet Wall Street’s expectations. The $200 million company is posting quarterly net losses, and its sales growth slowed in 2016, to 23%. According to analysts, though, non-SEC use cases of Workiva’s platform could constitute half of the company’s bookings in 2017. —V.R.

The spark for SecurityScorecard, a firm that rates companies based on their cyber defenses, was kindled when Aleksandr Yampolskiy suddenly realized that he could be fired.

That fact dawned on Yampolskiy when he was chief information security officer of Gilt Groupe. The shopping website was considering doing business with a firm that analyzed e-commerce to unearth potential fraud.

Under the arrangement, Gilt Groupe would have had to share all of its customer data with the analytics firm. As part of the vetting process, Yampolskiy’s team looked at a copy of the 30-page questionnaire that the analytics firm had filled out as part of Gilt Groupe’s security audit. “It looked great, and they answered all the questions positively,” he recalls.

But when he asked his team to “poke around” publicly available data to find out about the company’s security vulnerabilities, “at the last minute we found that there was unencrypted credit card data, [which meant] that we could lose all our customer information if we partnered with them.”

17Apr_TechCos_SecurityScorecardPreviously, Yampolskiy believed that if you worked hard and did a good job, then you should be promoted, regardless of outcomes based on external circumstances. But after his team unearthed the credit card risk, “for the first time I felt that if one of the cloud services that I used got hacked, then I could be fired,” he said. That led him to ask himself a question: To reduce career risks like the one he’d faced, was it possible to rate the security risks of vendors in the way that credit rating agencies rate borrowers?

The result was SecurityScorecard. Founded in 2013 by Yampolskiy and Sam Kassoumeh, the former head of security and compliance at Gilt Groupe, the software-as-a-service provider collects “thousands of signals every second” regarding the cybersecurity of companies.

After gathering that data via a proprietary search engine and subscription services, the firm then assigns a company a letter grade from A to F. In language that’s a bit thick with tech jargon, the firm’s website gives an overview of the sources its search engine scans: “malware analysis pipelines, monitored hacker chatter crawlers, honeypot/sinkhole infrastructures, vulnerability cadence checkers, and deep social engineering sensors.”

The idea of the grades is to give CFOs and security professionals a quick way to limit their employers’ exposures to vulnerable vendors. “They can do business only with those companies they believe can do a good job in maintaining the security of data,” Yampolskiy says. They can also limit their relationships with vendors that have weak cybersecurity practices or avoid them altogether.

Although the cybersecurity-rating market is in its infancy, competition is picking up. SecurityScorecard’s prime rival, BitSight, was launched two years earlier and appears to have an equally good reputation for the accuracy of its grades. Last June, FICO, the well-known credit score provider, signaled its entry into the business with the acquisition of QuadMetrics, a firm that uses predictive analytics to rate an organization’s cyber defenses.

For its part, SecurityScorecard has been making impressive strides of late. In 2016, the firm secured $20 million in funding from GV (formerly Google Ventures) to go with the $12.5 million provided by Sequoia Capital the prior year. Early in 2017, it announced two efforts that could boost its sales and marketing. In January, it launched a channel partner program aimed at resellers that can find new markets for its services. And in February the firm announced that it was launching Malware Grader, a free security rating tool built on its broader platform.

Given their informational tight-fistedness, it’s almost impossible to confirm the competitive claims of firms in the cyber ratings space. SecurityScorecard, at any rate, touts a big advantage in the scope of its ratings. “We have over 100,000 companies that we rate on a daily basis. Nobody else has that,” Yampolskiy says. —D.M.K.

For a company attempting the almost impossible feat of toppling traditional email platforms, the enterprise-messaging company Slack is off to a capable start. The San Francisco–based startup launched with only 16,000 users in February 2014, but at the time it raised $200 million in April 2016 it was valued at nearly $4 billion.

In truth, Slack has grown so explosively it’s probably better suited to a unicorns-likely-to-price list. The company now claims 77 Fortune 100 companies as clients. Slack also made some waves late last year by partnering with more mature companies like Google and IBM—moves that could continue to fuel its meteoric growth.

Slack’s secret is its simplicity. The platform lets users keep track of their messages by organizing them into channels. Instead of sending individual emails that get lost in inboxes, users can communicate directly with colleagues in real time. The conversations are searchable and highly transparent, although they can also be private. The company even rolled out voice and video chatting to users last year. According to Slack, its plug-ins, including popular ones for Trello, Skype, and Dropbox, are downloaded 415,000 times each month, making it one of the fastest-growing enterprise-messaging companies.

17Apr_TechCos_SlackBut Slack’s simplicity doesn’t stop at messaging. The platform also allows users to share files by dragging them from the desktop and dropping them directly into the Slack app. It’s that efficiency and integration that Slack is betting on to boost growth in 2017.

In December, the company announced a partnership with Google to incorporate some of the best-loved Google services into its platform. Millions of Google Drive files are shared on Slack each month, the company said. But, previously, requests to access and edit those files still had to pass through traditional venues, namely email. The partnership integrates those popular Google services into Slack’s app.

Slack also teamed up with IBM and its cognitive-computing platform, Watson. Slack hopes the artificial intelligence system will improve troubleshooting on its customer service platform by learning what answers work best for its users. “We want Slack to become better and smarter the more you use it,” said CEO and co-founder Stewart Butterfield, who previously co-founded the photo-sharing website Flickr.

Finally, in January 2017 Slack launched Enterprise Grid, a version geared toward large enterprises that features an unlimited number of workspaces and gives IT administrators the ability to add new layers of security and identity management. At launch, Snap also announced a portfolio of bots to integrate with SAP services, including a Concur travel and expense bot and a bot that connects with the HANA cloud platform.

With seven offices, including locations in Dublin, London, and Melbourne, Slack is hoping to expand its influence beyond the U.S. There are about 5 million daily active users on Slack, 1.5 million of whom pay, and the company is looking for more. Almost half of Slack’s daily active users are from countries outside North America, mostly in the UK, Japan, and Germany.

In posts on peer-to-peer software review site G2 Crowd, users say they like Slack’s integration with other apps and its usability, especially the ability to share files and pin important messages. But some users also consider Slack expensive, at $6.67 per month per active user (although there is a free version).

So, is Slack the answer to traditional email services? According to a survey conducted by the company, Slack users cut back on company emails by 50% when using the product. While that seems like it could take a significant chunk out
of traditional email services, only time will tell if Slack will deliver. —S.A.

The global market for e-signature technology currently tops out at about $500 million annually, according to some estimates. So how has DocuSign, even though it’s the market leader with an estimated 30% to 40% share, managed to pocket $500 million in funding? What justifies the unicorn’s $3 billion valuation? In large part it’s about the potential to further reduce companies’ reliance on paper documents and thereby trigger large efficiencies and cost savings.

E-signature has been a fast-growing niche for several years, and DocuSign says the volume of transactions it facilitated increased by 70% in 2016 alone. But that pace will inevitably wind down, so the company is forging ahead with an agenda to take on management of a much broader array of digital transactions.

“A tremendous number of business activities are still burdened by paper and analog processes, and DocuSign is well-positioned to help companies digitize them,” says Forrester Research analyst Craig Le Clair.

17Apr_TechCos_DocusignDaniel Springer, an experienced public-company CEO, came aboard as DocuSign’s chief executive in January, replacing Keith Krach, who remains the company’s chairman. Wall Street has been anticipating an IPO, and the only thing standing in the way is Springer’s wish to get comfortable with the predictability of earnings, he says.

“The core things required for [software-as-a-service] companies to go public are there—we have hundreds of millions of dollars in revenue and strong growth,” Springer tells CFO.

Le Clair says going public likely will help DocuSign. While the company has made a good case to analysts that it’s not burning through much of its cash and is financially sound, he notes, the market won’t truly know where the company stands until an IPO. “Going public means their financials will be transparent, which would relieve any fears in those areas,” the analyst says.

An IPO also would bring a cash infusion that could help DocuSign make acquisitions that would speed its transformation into a more well-rounded transaction management firm, according to Le Clair.

Springer, for his part, envisions that growth will stem more from the efforts of the company’s engineering team. “We want primarily to be a builder rather than a buyer,” he says.

Transaction management use cases, all driven by the same platform DocuSign uses to provide e-signature capabilities, already are expanding. Examples of moving away from paper-based processes, from DocuSign’s client base, include banks digitizing approvals for internal transactions and purchase orders; human-resources departments sending offer letters to job candidates; and sales departments more securely managing compensation programs.

A big part of the push is adding workflow capabilities around payments. That’s not a new technological capability, but it fits well with DocuSign’s established business.

“We’re not going to be a payments company per se, taking a piece of transactions,” says Springer. “But the first thing people tend to do after signing a contract is pay for what they just purchased. It’s a natural extension. So we’re helping companies leverage the top payment protocols to integrate payments on top of transactions.”

In particular, there may be great opportunities for DocuSign in regulated industries—even though most regulations, other than some recently approved ones, require a physical paper trail to establish compliance.

“It’s not that there’s an actual need for paper,” says Springer, “it’s just that regulations were written that way and people don’t want to take a regulatory risk. But one by one we’re seeing banks looking at this and saying it makes sense for their customers and for their business. There should be plenty of opportunity.” —D.M.

Neo Technology
As with most tech companies, Neo Technology was founded when a technologist got frustrated. In this case, Emil Eifrem, Neo Technology’s CEO, was at a small startup in Sweden trying to build a content management system on top of a relational database. Specifically, Eifrem needed to represent a complex pricing model for stock photos. “We spent a majority of our time fighting against the relational database,” says Eifrem. “The shape of our data was a mismatch with its building blocks.”

Many years later, Neo Technology is the creator of a leading open-source “graph” database, called Neo4j, that has been adopted in financial services, retail, government, and telecommunications. The product and its tools are used for real-time pricing, online product and service recommendations, fraud detection, and enterprise search. In November 2016, Neo Technology raised $36 million in a series D venture capital funding. According to Forrester Research, one-quarter of enterprises will be using graph databases by 2017. Gartner, on the other hand, predicts that over 70% of leading companies will pilot test a graph database by 2018.

What is a graph, or graph-oriented, database? Essentially, it’s a database that uses graph theory to store, map, and query relationships. While traditional relational databases store data in rows and columns, graph databases plot data points and the connections between them as objects or nodes on a graph.

17Apr_TechCos_NeoTech“There’s a lot of data that fits into rows and columns,” Eifrem explains. “But with the advent of the Internet, and connected devices, data is not always that simple.” Graph databases enable organizations to understand the value of connections, influences, and relationships in data.

A commonly cited application is a social networking company using a graph database to map out the connections of its users. But there are many other use cases, including online purchase recommendation engines for retailers and fraud detection for financial institutions. Supply chain analysis for some of the biggest food brands, by which they can trace a product back to the farm it originally came from, is another use case, says Eifrem.

The most widely publicized use of Neo Technology’s product was the Panama Papers—the leaked confidential documents of a Panama-based law firm that revealed the secretive offshore companies used by the rich and powerful to hide wealth and evade taxes. Journalists used Neo4j to connect the dots in the 11.5 million documents and link individuals to offshore accounts.

The Panama Papers raised awareness of graph databases, but so has the entrée of SAP, Microsoft, and Oracle into the space—all of them have announced graph database products. Those announcements were one of the reasons Neo Technology accepted $36 million in funding last year. “We have a three- to-five-year head start,” says Eifrem, “but they are big companies and can throw a lot of money at this.”

Still, with 100 or more organizations using Neo4j in mission-critical systems, analysts see Neo Technology as the leader. Noel Yuhanna, a principal analyst at Forrester, says Neo’s product is different because it uses a native graph model—data is stored, processed, and accessed in graph format. Larger vendors’ offerings are not necessarily native. Being native, Neo’s product is faster and more secure. “And it can scale very well—customers are running billions of connections with Neo,” Yuhanna adds.

It’s no surprise, then, that eBay, Cisco Systems, Novartis, Orange, Marriott International, and UBS are using Neo4j.

As Neo Technology’s website notes, “Your data volume will definitely increase in the future, but what’s going to increase at an even faster clip is the connections (or relationships) between your data.” And, as Eifrem once found out, relational databases don’t handle relationships well. —V.R.

10 to Keep An Eye On

These companies hope to be major disruptors in key enterprise information technology markets.

1. Zuora
Category: Subscription management platform
Pick your adjective for the subscription-based business model: booming, sizzling, skyrocketing, exploding. Zuora is in the heart of the action as a provider (a subscription-based one, of course) of billing and finance services for such businesses. The company has pocketed more than 800 customers, with potential new ones being formed every day.

2. Reckon Point
Category: Indoor positioning
Founded in 2015, Reckon Point uses WiFi and magnetic signals to create indoor maps that can track customers, assets, or employees within one meter of their exact location in real time. The system allows for a wide range of location-based services like enabling personalized ads to be displayed to customers moving within a space, or tracking patterns and trends in asset analytics that can optimize warehouse processes.

3. Atomiton
Category: IoT computing
It’s early days for Atomiton. But then, Microsoft started out small, too, on its way to becoming the dominant maker of personal computer operating systems. Atomiton’s “industrial Internet” software stack has already gained traction, with uses found in oil and gas, smart cities, and industrial automation. The company’s intelligent architecture could propel it to a leadership position in optimizing the performance of companies’ Internet-connected devices and products.

4. Rubrik
Category: Data backup and recovery
Data-backup and recovery technologies have weathered plenty of criticism for being either prohibitively expensive or difficult to use. Rubrik aims to counter that criticism with products that are neither. The company’s cloud data management platform delivers data protection, search, analytics, and compliance using a hybrid cloud setup. In February 2017, the two-year-old company reported a $100 million annual revenue run rate after just six quarters of selling.

5. Adyen
Category: Online payment services
Adyen, based in the Netherlands, is the Rosetta stone of online payments. It provides merchant online services for accepting electronic payments by credit or debit card, bank transfer, and other means. Its online platform connects to 250 different payment methods, from Visa to WeChatPay. In February, the company reported transaction volume of $90 billion in 2016, an 80% year-over-year increase. It services 7 of the 10 largest Internet companies.

6. Aviso
Category: Sales forecasting and analytics
Gone is the gut. CFOs impatient with sales forecasts based on intuition can now allay their anxieties via data science. Founded in 2012, Aviso aims to help clients “crush the quarter” by using predictive analytics to prioritize which targets to go after. The company has raised $31 million to date and its customers include Apttus, HubSpot, Nutanix, Pandora, and Splunk.

7. Agari
Category: Email security
Although the presidential election is over, politically motivated email crime still claims headlines. Agari, a cybersecurity firm that aims to block sophisticated phishing attacks, expects the prominence of government hacking to spur burgeoning attacks against companies. Its cloud-based Email Trust platform identifies the true sender of emails. The $24 million in funding Agari picked up in 2016 should provide ample fuel to address the opportunity.

8. Veem
Category: Cross-border payments
Small businesses represent $6 trillion of the $25 trillion market in cross-border payments. But they pay $50 billion in fees due to an antiquated wire transfer system that is cumbersome to use and provides little visibility into the status of transfers, according to Veem (formerly Align Commerce). The company’s multi-rail technology connects disparate parts of the international payments process, allowing SMBs to send and receive payments using only an email address.

9. Qlik Technologies
Category: Business intelligence
Qlik’s portfolio of cloud-based and on-premise solutions changes basic Excel data and other information into visualizations and analyses that can be shared by teams across many types of devices. The company says the intuitive design of its tools enables users of all technical skill levels to quickly and easily create, manage, and collaborate. Qlik has 40,000 customers worldwide.

10. Zoom
Category: Videoconferencing
Is Zoom the answer to web-conferencing woes? Its service unifies cloud video conferencing, online meetings, group messaging, and conference-room solutions. The platform, which does not require a complex video infrastructure, is used to hold webinars and host conference-room meetings on large HD displays, and provides a range of other conferencing capabilities. Zoom was founded in 2011 and is valued at $1 billion.