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Quarterly Insights: Future of Work
Lower-cost, employment-focused learning will take center stage in the post-COVID-19 world
Stagnant enrollment is just one of several long-term trends that had many traditional colleges struggling long prior to the COVID-19 crisis. Between these trends and the seismic shock of COVID-19, the outlook for many traditional colleges will likely remain cloudy. Participation in shorter, career-relevant, mostly online learning programs has been increasing for some time and skyrocketed when the pandemic hit. The shortfall of workforce digital skills relative to employer needs is increasing employer demand for employees with specific skills certifications, and employers are investing in programs that promote such low-cost, employment-focused learning paths. In this report, we discuss the state of the industry and highlight a few key players that are shaping the response to recent trends. We also provide an overview of future of work publicly traded stock performance and valuation, sector M&A activity, and private placements during the quarter.
Quarterly Insights: Cybersecurity
Data loss prevention market heating up
A confluence of factors has contributed to an increase in activity in the data loss prevention (DLP) market. Key among these factors are the migration of data and computing to distributed cloud platforms, the advent of regulations that demand better data protection, and the explosion of remote computing that occurred as a large percentage of the workforce began working from home due to COVID-19. In this report, we discuss the handful of relatively mature cybersecurity players that have dominated the DLP market and several relative newcomers that appear well positioned to disrupt the market with new technologies and novel approaches. We provide a high-level overview of DLP technology and the DLP market and highlight a few of the new solutions that aim to make DLP more effective, easier to manage and less costly. We also provide an overview of cybersecurity publicly traded stock performance and valuation, sector M&A activity, and private placements during the quarter.
Quarterly Insights: Internet of Things
ADT-Google smart home partnership likely to spark increased strategic, transaction activity
In this quarterly update, we highlight ADT’s (ADT) plans to combine its sales, installation, support and professional monitoring services with Google’s (GOOG) Nest product line and Google software to initially target residential security and other smart home market opportunities in the United States. The $450 million deal is the largest deal in smart home since Amazon’s (AMZN) $1 billion acquisition of Ring in May 2018. We discuss how the partnership may trigger an increase in smart home industry activity, including increased mergers and acquisitions, strategic investment, and new partnerships. We also provide an overview of IoT publicly traded stock performance and valuation, sector M&A activity, and private placements during the quarter.
White Paper: Lending as a Service
SME funding gap driving demand for technology to turbocharge lending
There is a significant worldwide funding gap for small and medium enterprise (SME) working capital needs owing to a mismatch between the size of loans needed by SMEs and the cost associated with traditional banks’ lending practice that prevents banks from recouping the cost of extending credit with associated interest income and fees. In this white paper, we discuss how both public policy and private sector innovation will increasingly look to Lending-as-a-Service (LaaS) companies — companies that use technology combined with existing and new data sources to reduce the cost and risk of lending to SMEs and thereby expand the supply of funding – as a key to filling the SME funding gap. We estimate the U.S. LaaS total addressable market (TAM) at $1.2-2.0 billion with only 3-4% penetration and expect the TAM to grow at an 18% annual rate driven by several growth factors. We also discuss BILL, EPAY, LC, ONDK and 23 private LaaS providers aiming to transform SME lending with innovative technologies and data.
White Paper: Video Telematics
Large and underpenetrated market, stage set for strong growth
Video telematics, which uses camera technologies combined with traditional telematics capabilities and increasingly advanced driver-assistance systems, is experiencing a surge in adoption and is finally poised to see much stronger connection growth due a confluence of factors we discuss in this report. The market currently features over 50 video solutions providers, which compares to the several hundred in traditional telematics. We expect the number of video providers to rise significantly and for most of these to be successful in the near term due to the high return on investment (ROI). We discuss many of the industry players and include profiles of DGLY, MIXT, TRAK.L, TRMB, VRRM and 36 private companies.
Quarterly Insights: Software as a Service
SaaS stocks outperform as the market searches for growth
As we forecast last quarter, our publicly traded SaaS universe outperformed the market during the pandemic. We discuss stocks viewed to be pandemic beneficiaries and highlight four companies with revenue multiples in the 37-50 range. We have also added 10 names to our SaaS universe and defined a new category for vertical SaaS (companies that target specific sectors). We also provide an overview of SaaS publicly traded stock performance and valuation, sector M&A activity, and private placements during the quarter.
Quarterly Insights: Internet of Things
Pandemic threat, similar health risks likely to boost cold chain solutions
Wireless cold chain solutions, which use IoT technology to monitor, track and manage the temperature of perishable goods across their supply chains, represent a large and relatively underpenetrated market opportunity. But adoption of wireless cold chain solutions has lagged relative to other IoT. The enormous societal resources being invested in developing and delivering COVID-19 treatments and vaccines – which often involve temperature sensitivity – is likely to further drive wireless cold chain solution demand. We foresee the wireless cold chain solution opportunity expanding to fill this need, and we highlight several public and privately held companies addressing these potentially high-growth opportunities. We also provide an overview of IoT publicly traded stock performance and valuation, sector M&A activity, and private placements during the quarter.
Quarterly Insights: E-commerce Optimization
E-commerce enablers and the pandemic tailwind
In this report, we examine how the COVID-19 pandemic is affecting the pace and magnitude of the shift toward online shopping and the resulting acceleration of investment in software-based services and tools that enable the online shopping ecosystem. With the imperative to sell online and the competitive bar for online selling rising, companies that enable these capabilities are seeing increased demand. We highlight a number of companies we believe are well positioned to benefit. We also provide an overview of e-commerce optimization publicly traded stock performance and valuation, sector M&A activity, and private placements during the quarter.
Quarterly Insights: Cybersecurity
Business of managing supply chain risks more critical than ever
Securing supply chains against cyberattacks is a challenge that has been gaining priority for many years. Recent developments such as trade wars, the COVID-19 pandemic, global human rights protests and increasingly sophisticated state-sponsored cyberattacks have further heightened awareness of the critical need to understand and address supply-chain vulnerabilities. In this report, we highlight several companies building innovative solutions in response to these challenges. We also discuss how the confluence of these forces, along with the inherently ever-evolving nature of risk, will make third-party risk management a large and fast-growing opportunity area for many years to come. We also provide an overview of cybersecurity publicly traded stock performance and valuation, sector M&A activity, and private placements during the quarter.
Quarterly Insights: Enterprise Productivity
SaaS for subscriptions has a pandemic tailwind
The subscription services sector is among the fastest-growing enterprise productivity sectors. This already rapid growth is being accelerated by the impact of COVID-19. In this report, we highlight companies and market subsegments poised to benefit from this unusual and powerful confluence of growth tailwinds. In particular, we discuss providers focused on the small- and medium-size enterprise segment and the growing trend of subscriptions for physical products. We also provide an overview of enterprise productivity publicly traded stock performance and valuation, sector M&A activity, and private placements during the quarter.
Quarterly Insights: Future of Work
The future of work is flexible
The world of work has been turned upside-down by COVID-19. While uncertainty rules, we believe it’s possible to extrapolate from trends that were beginning to emerge prior to the pandemic to a number of high-probability prognostications that portray a future of work that is more multi-modal, more flexible, and potentially more productive than work of the past. We discuss several early indicators of how worker productivity is being affected by the new ways of working and highlight how demographic differences among segments of the workforce may influence the future optimal mix of new and traditional work arrangements. These discussions point to promising areas of opportunity for technologies that address and capitalize on these changes, and we briefly highlight a number of companies providing these technologies. We also provide an overview of future of work publicly traded stock performance and valuation, sector M&A activity, and private placements during the quarter.
Human Capital Technology
Talent performance and engagement technology: Engaging and driving the modern workforce
Building on our work in Human Capital Technology, this white paper provides a deep dive into the world of performance management and employee engagement, analyzing the economic, demographic, and technology drivers underpinning rapid evolution in approaches and solutions and profiling selected companies we believe are well positioned to be category leaders.
The new Endpoint Security landscape: Exploring an important growth area
‘Endpoint security’ refers to directly protecting end-user-accessed, network-connected devices, such as laptops. It is arguably the most valuable and vulnerable segment of an organization’s infrastructure. In this white paper, we frame and assess the endpoint security landscape, discussing dynamics such as market drivers and the growth outlook, solution trends, hurdles facing next-gen market evolution, positioning of 25 or so private players, and an overview of eight key players.
Smart Home
Smart Home market large and underpenetrated, stage set for strong growth
Consumers have historically been slow to adopt connected device technologies in the home environment, but we think the stage is finally set for this to change, driven by the dissemination of smartphones, the growth and expansion of broadband networks, rising consumer awareness of Smart Home technology, and increasing interoperability among vendors. In this white paper, we segment and size the Smart Home market opportunity and profile 18 significant public and private players participating in the Smart Home ecosystem.
Human Capital Technology
SaaS: Talent Development: The Democratization of Learning & Development
A number of factors are driving talent acquisition and development to the top of the strategic priority list for global enterprises of all sizes. Labor shortages in crucial functional areas such as technology, sales, and marketing are making it all but impossible for companies to meet their talent needs solely with traditional recruiting techniques like job postings: a trend we expect to intensify, given the growth of the worldwide knowledge economy. The global economic recovery is shifting power from employers to employees with high-demand skills and increasingly turning labor into a seller’s market. We expect cutting-edge technologies, often offered on a subscription, software-as-a-service basis, to drive considerably more value in human capital in the future, spurring revenue growth by ensuring employers have the talent they need to meet strategic goals. In this white paper, we analyze the market for talent acquisition and analytics technology, discuss the drivers we believe represent a tailwind for the leading and differentiated providers, and profile more than 60 companies.
IoT/M2M Platform Software
Overview of an essential and increasingly appreciated ecosystem layer
The ability to help manage the inherently complex Internet of Things/Machine-to-Machine networking environment as well as automate related tasks at scale has pushed platform software to the fore, sparking significant investor and M&A interest and making an in-depth look at this market a timely undertaking. This white paper offers a high-level overview of the infrastructure software market beginning with a basic description of a platform and the three general platform types. We then describe the benefits of using a platform, discuss ways to segment the market, size the global opportunity, highlight adoption drivers and trends, and offer some high-level conclusions. After our overview, we profile 30 public and private players.
Internet of Things/M2M
Looking at Fleet Management Solutions, move to 2.0
We see a maturation at the high end of the North American fleet management solutions market, specifically heavy trucks and enterprises with 1,000+ vehicles, which we expect to spur increased vendor differentiation, continued consolidation, greater churn, and a move by some players to attack the less-penetrated SMB market. We also believe the proliferation of low-cost, high-quality in-vehicle devices is generating a telematics data stream that will be increasingly integrated with data from multiple parts of the enterprise for analysis as part of a larger set to produce additional actionable insights (an area we call FMS 2.0), creating both opportunities and threats for existing fleet management solutions vendors. We believe companies with scale combined with an appreciation for data analytics – either developing or planning to offer such capabilities – are in better position to take advantage of these changing dynamics and capture share than vendors lacking these attributes. In this white paper, we examine the dynamics behind this evolution and its likely impacts, and we discuss six relevant companies.
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