As tech companies large and small shed employees in hopes of better aligning their profit and loss statements with new market realities.
It’s clear that cutting costs to please investors is the new norm.
But there are other ways to keep the investing public happy, including beating growth and profitability expectations.
That’s what UiPath did last week when it reported its lagging financial performance, which included a top and bottom line compared to analysts’ expectations. Its shares rose.
Companies
It turns out that while there’s a wrinkle in the trend today among tech companies and many of their customers to cut staff, scale back projects, and handle cash with more respect.
One way to make your staff cheaper is to downsize them.
Another option is to increase productivity and streamline your spending on a dollar-for-dollar basis.
This is where UiPath and the larger automation market robotic process automation, or RPA can have an advantage over other software categories.
Automation
Appian’s upbeat earnings report last month and lengthy discussion of its automation work during the earnings call underscored that tech companies are seeing strong demand for automation help.
There is even more data on the point we were chewing over.
The recent software spending report from Battery Ventures that we discussed earlier has even more optimistic data.
In short, everyone wants to save money on their software spending.
But if your startup is building technology to automate tasks and quickly increase productivity, you might be able to stop the decline.
Investors
Let’s talk about it. In today’s market reality, tech companies are laying off employees to reconcile their income statements and please investors.
However, UiPath has found another way to please the investing public by shattering growth and profitability expectations.
The company posted a decline on both the top and bottom lines compared to analysts’ expectations, sending its stock higher.
While downsizing and cutting costs are all the rage among tech companies and their customers, there’s a wrinkle in the trend.
One way to make staffing cheaper is to reduce it, but another way is to make it more productive, thereby making spending more efficient on a dollar-for-dollar basis.
This is where UiPath and the larger automation market, specifically robotic process automation (RPA), can have an edge over other software categories.
Appian’s upbeat earnings report last month and lengthy discussion of its automation work during the earnings call underscored that tech companies see strong demand for automation help.
A recent report on software spending from Battery Ventures also contained bullish data that startups creating technology to automate tasks and quickly increase productivity may be able to arrest the decline.
In short, while everyone wants to save money on their software spending, startups creating technology to automate tasks and quickly increase productivity can thrive in the current market reality.
Sources: Techcrunch | globalvillagespace