Head Fake: Enduring Trends in a Shaky Market with CEOs of Freshworks, Commvault, Plus Chips
Girish Mathrubootham of Freshworks, Sanjay Mirchandani of Commvault, Paul Hudson of Sanofi
To start this week, a surge for stocks, and fresh questions for two of last decade’s savviest software innovators: Salesforce and Adobe.
Starboard Value this week announced it has amassed what it calls a “significant” position in Salesforce, saying the company should improve margins and set more ambitious growth targets relative to its peers. Adobe has been under pressure since last month announcing its intent to buy smaller competitor Figma for $20 billion, or about 40x revenue.
Adobe and Salesforce earned reputations as pioneers for different reasons. Marc Benioff’s Salesforce pioneered the idea of software as a service, and enterprise software delivered through a browser. Shantanu Narayen’s Adobe pivoted. The lumpy, downloadable software approach was out; the predictable, scalable, cloud-based subscription business model was in.
Now both Salesforce and Adobe face challenges from smaller upstarts (Atlassian, Canva) and larger giants (Microsoft). I spoke with Adobe’s CEO and its head of product today — but more on that in the next newsletter.
This week I talked to a couple of CEOs about how their very different companies are weathering an economic slowdown and stock market volatility.
Girish Mathrubootham, founder and CEO of Freshworks, is leading a $4 billion market cap company that IPOed last year, focused on functions like marketing, sales and support. The stock price has fallen by two thirds, but he’s confident that the company can take the long view and win with modern technology.
Sanjay Mirchandani, CEO of Commvault, is leading a $2.5 billion market cap company that’s been around longer than the latest crop of data resilience and recovery companies (see Fortt Knox guests Cohesity and Rubrik, among others). He’s expressing confidence that Commvault’s ability to continue serving customers’ legacy needs will see the company through the slowdown.
Indeed, an important unknown is how enterprise customers will respond to tough times. Freezing or dramatically slashing technology infrastructure won’t be an option for healthy companies; they’ll risk starting an economic rebound flat footed or ceding market share to better-equipped rivals. But customers will have an opportunity to rethink how they spend their technology dollars. Will they? There will be outsized winners and losers beneath overall spending numbers that may shift in single-digit percentages.
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