For the past 11 years, ETR has conducted its quarterly Technology Spending Intention Survey (TSIS), tracking where IT budget dollars planned to be spent. Following each survey, the ETR team also highlights some of the highest conviction data sets for the vendors we track, creating our Quick Takes list. While only qualified community members and subscribers get access to all of the details, in this article we will provide a behind the scenes look at two of the companies we cover. If you would like full access, simply request your FREE TRIAL to get started today.
As you can see in the survey participation breakdown illustrated below, in the most recent TSIS survey period we saw participation from nearly 1,200 IT Decision Markers with continued strong representation among Fortune 500 and Global 2000 organizations with more than a third of responses coming from the C-suite. The survey reviews both higher-level Macros trends and Vendor-specific analysis. Macro takeaways cover budget increase or decrease percentages, sector priorities, hiring and remote work trends, supply chain issues, and many more.
ETRs Macro Survey originally began as a quick reaction to the COVID-19 pandemic back in early March of 2020 and we have continued to closely examine the topic ever since. The main takeaway from the most recent iteration is that organizational plans to deploy new IT projects have stalled since the beginning of the year. Simultaneously, the need to increase hiring has greatly accelerated, reaching its highest levels in our work. It is clear that the lack of skilled IT talent continues to be an issue that enterprises of all sizes are struggling to navigate.
Regarding our ongoing research into remote and hybrid work trends, the current data shows that 42% of employees are working fully remote, with another 31% in a hybrid model, versus 27% back in the office full time. Looking further out, permanent expectations are for fully remote workers to drop considerably to 25% of the workforce, while both hybrid and fully in-office work grow by 800 to 900 basis points, respectively. In past iterations of this survey, the expectations for faster returns to in-office have proven a bit optimistic, but even if these numbers play out as shown, having 64% of the workforce permanently in remote or hybrid models represents a dynamic shift from traditional labor models.
Moving on to the Vendor level, ETR releases 75+ detailed reports every quarter. Of those names, we select the highest conviction data sets to create our Quick Takes list of both Positively and Negatively trending enterprise technology vendors. You can see the full list below. Today, we will be taking a sneak peek at two of those names.
Alteryx. Let's start with a closer look at Alteryx. As you can see above, the ETR outlook on the vendor transitioned from Negative back in October of 2021 to Positive in the most recent survey iteration due to spending intention data drastically improving. In the most recent report, the ETR Research team summarized the data set thusly, "After faltering throughout 2021, Alteryx appears to have now made a substantial comeback in both Net Score and Pervasion in our data. Over the past 3 surveys, Alteryx’s Net Score is up a whopping 148% across all respondents and up 147% among Fortune 500 clients. It now boasts a solid 31.4% Net Score overall. Its gains have moved it into the 68th percentile in Net Score compared to its Analytics / B.I. / Big Data sector peers. Ultimately, a growing Net Score and number of citations, notably high Adoption rates, low and dropping Replacement rates, and a Net Score far ahead of data preparation/ETL peers warrant a step up to a Positive rating for Alteryx."
Despite extremely volatile markets in a battleground to determine proper valuations, ETR's spending intentions data directly from the source of IT decision-makers is one source of consistent signals that our subscribers can leverage in their decision-making processes, whether for IT projects or investments. Earlier this week, Alteryx reported F1Q (Mar) revenue of $157.9M (+33% y/y vs +8.3% last q) vs cons $145.9M, and guided F2Q (Jun) revenue to $159M-$162M ($160.5M at midpoint, or +33.6% y/y) vs cons $156.5M, and also guided FY22 (Dec 22’) revenue higher to $730M-$740M ($735M at midpoint, or +37% y/y) vs cons $715.1M. ETR will continue to monitor the data sets for Alteryx to see if this growth can continue.
RingCentral. Continuing on the theme of improving datasets, next we take a closer look at RingCentral, where higher customer acquisition coupled with negativity subsiding and growing citations lead us to move RingCentral to a Neutral viewpoint after having been Negative since JUL21. The company is set to report earnings next week, so let's review their data set to see where the vendor is gaining the most traction. In the most recent reports, the ETR Research team wrote that, "Updated 2022 spending intentions data for RingCentral have rebounded strongly enough to lift ETR’s Negative outlook that has mired the vendor since 2H21. After seeing its Net Score cut in half last year, updated 2022 spending intentions have rebounded 52% higher in the most recent data set for RingCentral. The improved Net Score was driven by the highest Adoption rates we have captured for the vendor in 2 years. Back in APR21, updated 2021 spending intentions were comprised of a 48% expansion rate (Adopt + Increase) versus a 14% Contraction rate (Decrease + Replace), that ratio slipped to 37% Expansion vs 20% Contraction in JAN22 but has now recovered to a 42:15 ratio in this survey period, driven by strong Adoptions. Perhaps the most important reversal since the JAN22 data came from Mid & Small respondents, which represents 53% of the vendor’s respondents, and where RingCentral’s Net Score has grown 212% since the lows captured in JUL21. In summary, the Rebounding Net Score driven by high Adoptions, along with Pervasion growth lifts RingCentral’s long-standing Negative outlook."
In addition to the analysis, ETR also relies on its proprietary regression forecast model to predict what reported revenues and guidance might be for the vendors we track. Take a look at what our model has to say about RingCentral's next two quarters below.
As you can see above, our regression forecast model predicts that the vendor has a higher than 80% chance to beat the current consensus revenue estimates by 2% or more for the next two quarters. ETR will continue to track the vendor in all sectors the company operates in to see if the rebound in spending intentions continues into the second half of the year. If you want to see all the details on these vendors, and hundreds more, request your Free Trial today.