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Protocol | Enterprise

Qualtrics’ explosive IPO gave Bill McDermott his ‘told ya so’ moment

SAP's former CEO faced criticism over the price tag of an $8 billion deal back in 2018. It looks pretty savvy now.

Qualtrics’ explosive IPO gave Bill McDermott his ‘told ya so’ moment

Bill McDermott would like to set the record straight on Qualtrics.

Image: ServiceNow

It's quickly becoming the norm among software IPOs, but Qualtrics had a blockbuster public offering on Thursday.

Shares of the company, which provides customer sentiment monitoring, ended the day up 51%, giving it above a $24 billion valuation, higher than Wall Street initially expected. That's great news for CEO Ryan Smith and his over 3,000 employees. But it's also a win for SAP and vindication for former CEO Bill McDermott, who bought Qualtrics in 2018 as part of an acquisition spree for $8 billion. At the time, that price tag was criticized by analysts.

"Let's set the record straight," McDermott, who is now CEO of ServiceNow, told Protocol. "Not a single one of those large-scale transactions were anything less than successful. One such example is Qualtrics."

For Qualtrics, at least, McDermott's right. And SAP should get credit for helping the company grow as quickly as it did. Revenue in the first nine months of 2020 alone rose 30% year-over-year to $550 million, per its S-1 filing. While Smith requested the spinout after former SAP co-CEO Jennifer Morgan left in April, he and the company have acknowledged just how influential the German software firm was in helping reach the scale it's at now.

"Over the past two years we have increased our deal sizes, broadened and deepened our geographic footprint, and continued to build an exceptional team," Qualtrics wrote in the filing.

That's a reflection of the power that SAP still wields in C-suites despite its own struggles. And the two companies plan to continue to work together despite the IPO, namely because SAP still has a majority stake in the company.

But it remains to be seen how close the connection stays, especially since SAP has its own uphill battle to worry about. And there are already signs Qualtrics is pushing for growth without the SAP sales engine: It recently brought on former Microsoft executive Brad Anderson as the product and services president, as well as former Salesforce PR leader Gina Sheibley as chief communications officer, among other hires. Anderson, who helped lead Microsoft 365 deployment at enterprises, will be key to expanding sales among new and existing customers, while Sheibley led Salesforce's PR efforts for several key acquisitions, including Tableau and MuleSoft.

But whatever the future holds for Qualtrics, today McDermott finally gets his "told ya so" moment.

Protocol | Workplace

The Activision Blizzard lawsuit has opened the floodgates

An employee walkout, a tumbling stock price and damning new reports of misconduct.

Activision Blizzard is being sued for widespread sexism, harassment and discrimination.

Photo: Bloomberg/Getty Images

Activision Blizzard is in crisis mode. The World of Warcraft publisher was the subject of a shocking lawsuit filed by California's Department of Fair Employment and Housing last week over claims of widespread sexism, harassment and discrimination against female employees. The resulting fallout has only intensified by the day, culminating in a 500-person walkout at the headquarters of Blizzard Entertainment in Irvine on Wednesday.

The company's stock price has tumbled nearly 10% this week, and CEO Bobby Kotick acknowledged in a message to employees Tuesday that Activision Blizzard's initial response was "tone deaf." Meanwhile, there has been a continuous stream of new reports unearthing horrendous misconduct as more and more former and current employees speak out about the working conditions and alleged rampant misogyny at one of the video game industry's largest and most powerful employers.

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Nick Statt
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

Over the last year, financial institutions have experienced unprecedented demand from their customers for exposure to cryptocurrency, and we've seen an inflow of institutional dollars driving bitcoin and other cryptocurrencies to record prices. Some banks have already launched cryptocurrency programs, but many more are evaluating the market.

That's why we've created the Crypto Maturity Model: an iterative roadmap for cryptocurrency product rollout, enabling financial institutions to evaluate market opportunities while addressing compliance requirements.

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Caitlin Barnett, Chainanalysis
Caitlin’s legal and compliance experience encompasses both cryptocurrency and traditional finance. As Director of Regulation and Compliance at Chainalysis, she helps leading financial institutions strategize and build compliance programs in order to adopt cryptocurrencies and offer new products to their customers. In addition, Caitlin helps facilitate dialogue with regulators and the industry on key policy issues within the cryptocurrency industry.
Protocol | Workplace

Founder sues the company that acquired her startup

Knoq founder Kendall Hope Tucker is suing the company that acquired her startup for discrimination, retaliation and fraud.

Kendall Hope Tucker, founder of Knoq, is suing Ad Practitioners, which acquired her company last year.

Photo: Kendall Hope Tucker

Kendall Hope Tucker felt excited when she sold her startup last December. Tucker, the founder of Knoq, was sad to "give up control of a company [she] had poured five years of [her] heart, soul and energy into building," she told Protocol, but ultimately felt hopeful that selling it to digital media company Ad Practitioners was the best financial outcome for her, her team and her investors. Now, seven months later, Tucker is suing Ad Practitioners alleging discrimination, retaliation and fraud.

Knoq found success selling its door-to-door sales and analytics services to companies such as Google Fiber, Inspire Energy, Fluent Home and others. Knoq representatives would walk around neighborhoods, knocking on doors to market its customers' products and services. The pandemic, however, threw a wrench in its business. Prior to the acquisition, Knoq says it raised $6.5 million from Initialized Capital, Haystack.vc, Techstars and others.

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Megan Rose Dickey
Megan Rose Dickey is a senior reporter at Protocol covering labor and diversity in tech. Prior to joining Protocol, she was a senior reporter at TechCrunch and a reporter at Business Insider.
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Protocol | Workplace

What’s the purpose of a chief purpose officer?

Cisco's EVP and chief people, policy & purpose officer shares how the company is creating a more conscious and hybrid work culture.

Like many large organizations, the leaders at Cisco spent much of the past year working to ensure their employees had an inclusive and flexible workplace while everyone worked from home during the pandemic. In doing so, they brought a new role into the mix. In March 2021 Francine Katsoudas transitioned from EVP and chief people officer to chief people, policy & purpose Officer.

For many, the role of a purpose officer is new. Purpose officers hold their companies accountable to their mission and the people who work for them. In a conversation with Protocol, Katsoudas shared how she is thinking about the expanded role and the future of hybrid work at Cisco.

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Amber Burton

Amber Burton (@amberbburton) is a reporter at Protocol. Previously, she covered personal finance and diversity in business at The Wall Street Journal. She earned an M.S. in Strategic Communications from Columbia University and B.A. in English and Journalism from Wake Forest University. She lives in North Carolina.

Protocol | Fintech

The digital dollar is coming. The payments industry is worried.

Jodie Kelley heads the Electronic Transactions Association. The trade group's members, who process $7 trillion a year in payments, want a say in the digital currency.

Jodie Kelley is CEO of the Electronic Transactions Association.

Photo: Electronic Transactions Association

The Electronic Transactions Association launched in 1990 just as new technologies, led by the World Wide Web, began upending the world of commerce and finance.

The disruption hasn't stopped.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

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