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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.

People

Making the economy work for Black entrepreneurs

Funding for Black-owned startups needs to grow. That's just the start.

"There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help," said Mastercard's Michael Froman.

Photo: DigitalVision/Getty Images

Michael Froman is the vice chairman and president of Strategic Growth for Mastercard.

When Tanya Van Court's daughter shared her 9th birthday wish list — a bike and an investment account — Tanya had a moment of inspiration. She wondered whether helping more kids get excited about saving for goals and learning simple financial principles could help them build a pathway to financial security. With a goal of reaching every kid in America, she founded Goalsetter, a savings and financial literacy app for kids. Last month, Tanya brought in backers including NBA stars Kevin Durant and Chris Paul, raising $3.9 million in seed funding.

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Michael Froman
Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
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Building better relationships in the age of all-remote work

How Stripe, Xero and ModSquad work with external partners and customers in Slack channels to build stronger, lasting relationships.

Image: Original by Damian Zaleski

Every business leader knows you can learn the most about your customers and partners by meeting them face-to-face. But in the wake of Covid-19, the kinds of conversations that were taking place over coffee, meals and in company halls are now relegated to video conferences—which can be less effective for nurturing relationships—and email.

Email inboxes, with hard-to-search threads and siloed messages, not only slow down communication but are also an easy target for scammers. Earlier this year, Google reported more than 18 million daily malware and phishing emails related to Covid-19 scams in just one week and more than 240 million daily spam messages.

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Everything you need to know about the Coinbase direct listing

Coinbase's IPO valuation could be the largest by a U.S. tech company since Facebook went public.

Coinbase will go public on Feb. 25.

Image: Chesnot/Getty Images

Coinbase, the cryptocurrency exchange, filed its S-1 on Feb. 25 to go public via direct listing on Nasdaq. In the lead-up to the IPO, Coinbase shares traded on the Nasdaq Private Markets at $373, yielding a company valuation of over $100 billion, per Axios. If share prices remain at or above these levels, Coinbase's IPO valuation could be the largest by a U.S. tech company since Facebook went public in 2012. The company hasn't yet set a date for its trading debut.

Depending on who you ask, the Coinbase IPO could be the latest symptom of a major financial bubble or a significant milestone in the restructuring of the global financial system. Coinbase's mission is to "create an open financial system to the world." It believes the prevailing system of global finance, with the U.S. dollar serving as the global reserve currency, is outdated and inefficient. This mission pits the interests of Coinbase squarely against many of the world's most powerful nations, making regulation a grave and — if cryptos continue gaining momentum — probable risk.

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Hirsh Chitkara
Hirsh Chitkara (@ChitkaraHirsh) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians.
Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Protocol | Enterprise

A Black Salesforce manager alleged a ‘culture of rampant microaggressions’

The company continues to face criticism over what employees claim is a failure to match external hype about equality with internal progress.

Salesforce is ramping up efforts to sell its software to the U.S. government.
Photo: Stephen Lam/Getty Images

The internal backlash against Salesforce's touted diversity and inclusion efforts continues.

Vivianne Castillo, a manager in Salesforce's design research and innovation unit, announced her departure earlier this month in an internal note that criticized the software giant's culture as one that is discriminatory against Black employees, according to a screenshot of the company chat that was viewed by Protocol. Her last day is Friday, per a Twitter post.

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Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

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