Altair Engineering   of Troy, MI, is a leading supplier of engineering software used for analysis of mechanical designs.  Altair is used throughout the design process, from concept to changes to be made when a manufactured product is in-service.  The company completed its IPO on October 31, 2017.  While newly public, Altair has a 32-year history.  The company was co-founded by Jim Scapa in 1985 and he remains the CEO.   

Anaplan  of San Francisco, CA, provides a SaaS-based planning and performance management platform that increases productivity in finance, sales, supply chain, marketing, Information technology and human resources.   Anaplan enables users to utilize big data and algorithms.  While the primary applications are in finance and accounting, approximately 15% of the company's sales are for supply-chain management applications.  For example, consumer electronics company Sonos uses Anaplan to manage its 200 suppliers across over 2,000 sourced components.  Anaplan is replacing spreadsheets in many of its applications.

Based in Lowell, MA, Kronos is a leader in workforce management software.  The company was founded by Mark Ain in 1977 to better track employee work hours.  Mark's brother Aron Ain is now CEO.  In 1980, Kronos introduced a microprocessor-based time clock.  Kronos went public in 1992 and reached $500 million in revenue by 2000.  With the backing of Hellman & Friedman, Kronos was taken private in 2007 for $1.8 billion. Going private allowed Kronos to invest in a SaaS solution and add capabilities through small acquisitions, away from the quarterly earnings pressure of being a public company. 

 

Today, Kronos has over 5,000 employees and over $1 billion of revenue.  Kronos has an installed base of over 12,000 Workforce Management on-premise software customers, and is in the process of transitioning these on-premise customers to SaaS systems.  In November 2017, Kronos introduced Workforce Dimensions, an open, real-time and responsive SaaS system.   Kronos competes with Automatic Data Processing, Inc. (ADP), Ultimate Software Group, Inc.(ULTI), Ceridian (part of Fidelity National Financial, Inc., FNF), Paychex, Inc. (PAYX), Paylocity Holding Corp.(PCTY), iCIMS and other providers of payroll and human resource management software.

 

Growth is also coming from selling new human resources and payroll functionality to the installed base and pushing into the small business market with Workforce Ready, a platform that manages employees from pre-hire to retirement for salaried, hourly, full-time or part-time.  It integrates human resources, time and attendance for a single employee record that's updated in real time. Workforce Ready is being distributed through payroll service bureaus. 

	Mark Julien, CFO

For multi-national customers, Kronos' scale and international presence provides a competitive advantage relative to smaller, domestic competitors.

 

To accommodate its growth, Kronos is in the process of moving from Chelmsford, MA, into the iconic Wang Towers in Lowell.  The move started in 2017 and will continue in 2018.

 

Mark Julien, CFO, will present at the Needham Growth Conference on Wednesday, January 17 at 1:30pm.

Based in San Jose, CA, Zoom was founded by CEO Eric Yuan in 2011.  He was a part of Cisco's WebEx division and pushed for changes that the larger company was not able to make.  Zoom's mission is make video and web conferencing frictionless.  The pricing plans are simple and the setup time is minimal.  The Basic plan is free and allows for up to 100 participants in video and voice meetings up to 40 minutes.  Pro plans start at $14.99 per month per meeting host.

 

Zoom has over 750,000 customers and is particularly favored by technology companies. Illustrating its growth, in August 2017, Zoom delivered an annualized 20 billion minutes of video, up from 7 billion a year earlier.  In April 2017, Zoom launched in the Telehealth market with integration into the hospital infrastructure, which has many security and compliance requirements. On its site, Zoom has a testimonial from Phoenix Children's Hospital about the benefits of using Zoom in Telehealth.

 

Competitors include Cisco/WebEx, Microsoft (MSFT), Vidyo, BlueJeans Network, LogMeIn (LOGM), Adobe (ADBE), Polycom and Google (GOOGL).  It's a daunting list, but Zoom has established its position through the quality of its video and ease of use. 

 

Zoom has top-tier venture backing, including Sequoia Capital, Qualcomm, Jerry Yang of Yahoo fame, Horizons Venture, and Emergence Capital.  Zoom raised $100 million from Sequoia in a January 2017 Series D round.

The information presented in this commentary is not intended as personalized investment advice and does not constitute a recommendation to buy or sell a particular security or other investments.

 

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