Good morning and welcome to Tech Report Weekly 7 December. This week Airbnb is set for its long-anticipated market debut. Oracle and Broadcom report their latest quarterly results. And leading experts join the virtual Q2B event to discuss all things quantum computers.
In this week’s Spotlight, we look at Salesforce’s acquisition of Slack and why it is a significant moment in the enterprise software market. The Verdict team has also highlighted some of the top technology journalism we’ve been reading from around the web, as well as key quotes, news and features from our own reporting. If you’d like all of this sent straight to your inbox every Monday at 7am, subscribe here.
Have a great week and we hope you enjoy the latest Tech Report Weekly.
Three things happening in technology this week
Airbnb goes public
What’s happening: Airbnb makes its long-anticipated public listing.
Why it matters: When home rental startup Airbnb published its initial public offering (IPO) prospectus last month, it warned investors that it “may not be able to achieve profitability”. This week it is set to go public with a valuation of $35bn to $42bn. Shares are expected to be priced between $44 and $50 per share, raising as much as $2.6bn. Reports suggest the top end of the range could be boosted as high as $60 per share. Such is the state of technology markets, which prioritise future growth over short-term stability.
This comes in a year when Airbnb has felt the impact of the pandemic more acutely than others, with global travel disruption decimating revenues. But even before Covid, the company was running at a loss – down $674m in 2019 – and is yet to make an annual profit in its 12-year history, despite its app being wildly popular among travellers. However, the US company showed it could turn things around, swinging back into profit in its most recent quarter. This was after a cost-cutting regime that saw it make 25% of its workforce redundant, slash its hefty marketing budget, and raise $2bn from private equity. Airbnb’s stock market debut carries another weight on its shoulders – its success or failure will be a bellwether for the travel industry in 2021 and beyond.
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How to follow it: Airbnb looks set to pull the trigger on its IPO on Wednesday, with trading beginning the following day. We’ll be covering all the developments.
Enduring enterprise giants post results
What’s happening: Oracle and Broadcom publish their latest quarterly results.
Why it matters: Oracle’s acquisition of TikTok’s global business is in limbo. In the meantime, the database software giant continues its shift to a subscription-based software model that puts cloud computing front and centre. In the previous quarter, growth in Oracle’s cloud services – which makes up three-quarters of its business – helped the US firm return to growth, with total revenues up 2% year on year at $9.37bn. Prior to that, sales had slumped as companies reined in spending on enterprise projects when the pandemic first hit. This time around, analysts expect revenue of $9.79bn, which would again mark a 2% year-on-year increase. Wall Street expects earnings per share of $1, which would represent a solid profit increase of 11% from a year ago.
Wireless chipmaker Broadcom will also publish its latest results this week. Last year the company’s core semiconductor business generated 77% of its revenue, with rest mainly coming from its infrastructure software segment. Analysts expect Broadcom’s revenue to rise 6% for the year, but higher growth is anticipated next year as demand for 5G phones powered by Broadcom chips generate tailwinds.
How to follow it: On Thursday Oracle reports fiscal 2021 Q2 results and Broadcom reports fiscal 2020 Q4 results.
Getting practical about quantum computers
What’s happening: Quantum computing event Q2B gets underway.
Why it matters: Last year Google claimed it had reached ‘quantum supremacy’, a benchmark where a quantum computer completes a task that a conventional computer would be unable to do. Despite this landmark moment, fully fledged, error-free quantum computers remain some way off. In the meantime, researchers and technologists are continuing to explore the ways in which the technology will – and already is – changing the world.
The Practical Quantum Computing event, or Q2B, is one arena for such discussions, focusing on the ways that quantum computers are already having an impact on businesses. Speakers at the virtual event include Google co-founder Eric Schmidt, AWS Quantum Computing’s John Preskill, Airbus CTO Grazia Vittadini, and many more.
How to follow it: The event runs Tuesday to Thursday. You can register to attend here ($).
From the magazine
The pandemic has been a challenging time for many businesses, but for some, it has also proved a unique environment to launch. Luke Christou speaks to startups that have launched amid Covid-19 to find out how they are succeeding in this environment.
Spotlight on: Slackforce
At first glance, Salesforce and Slack might seem like an odd match. Salesforce provides a suite of applications to help sales teams manage their relationships with clients. Slack is a channel-based messaging platform where employees discuss work, collaborate and exchange GIFs. But on closer inspection, the two companies have much in common and complement each other in a number of ways. When Salesforce chair and CEO Marc Benioff described his company’s $27.7bn acquisition of Slack as a “match made in heaven”, he might be right.
Uniting Salesforce and Slack has advantages for both companies in the fiercely competitive enterprise software market. And both firms have a mutual rival – Microsoft. The tech giant has its own collaboration tool competing against Slack, Microsoft Teams, which Slack CEO Stewart Butterfield described as the “vehicle” for Microsoft’s aim to kill Slack. But with Slack taken under Salesforce’s wing, it can be protected by its deeper pockets and greater resources.
The deal will see Slack become the new interface for Salesforce Customer 360, a move that could reimagine the way enterprise software tools are designed and used. The use of collaborative digital tools has been accelerated by the coronavirus pandemic. However, Slack has struggled to convert its success into profits. But with Salesforce’s sprawling workforce and enviable book of leads, Slack’s sales fortunes may receive a much-needed boost. Perhaps above all, though, the Salesforce-Slack deal is a $27.7bn bet on the future of work.
– Robert Scammell, co-editor, Verdict
Last week’s highlights
Quote of the week
“The internet gives you a window to the world. Having broadband access should be a right. How can you access services – not just banking services – unless you have internet?”
– Anne Boden, CEO of Starling Bank, on ensuring vulnerable communities can access digital banking services.
What the Verdict team has been reading
This excellent long-read from Samira Shackle for the Guardian will have you questioning whether there really was a drone.
– Robert Scammell, co-editor
Wired’s Katharina Kropshofer, Sara Moraca and Silvia Lazzaris examine the worrying impact Covid-19 has had on online gambling in the UK
– Ellen Daniel, co-editor