None of the deals came to fruition - they were all trials - something you have to be very aware of in software sales. A signed agreement can mean many things, and when scant on detail often don’t mean all that much
I have mentioned before, for what it’s worth, I work in software sales for a significant global enterprise vendor - could say a lot, but will just mention two things that may go some way to explaining my caution.
Firstly, there are literally 1,000s or hopeful startups pushing their wares in the SaaS space with the hope of success - to be fair here, GSW to me does seem to have something quite compelling - however, when a new tech comes along, it is very very hard to place and will go through extensive proof is concept testing in what you call production environments - this can take months - simply, you don’t just walk in an implement a new solution - so a deal with any company can mean many different things and hoops to jump through.
Secondly, a rule of thumb we work on is that it is not a sale and nothing to get excited about until the PO is signed and money is in the bank - and with what we call Pipeline deals that are in early stage, usually 10% closing is what we would work on.
So if say GSW had $300 mill in pipeline deals we would forecast $30 mill revenue.
An awful lot and I mean a lot can go wrong before these deals actually come to fruition and many fall by the wayside.
And then with SaaS you still need to secure the sale again each year, and need to have a very strong support team to ensure success.
So ... you are holding a fully dillited $750 mill market cap stock that does seem to have a very good idea, and is having early success with securing some large agreements, which is great early news and the market is loving it - but what does it all mean and where will it end up?
Only quantitative numbers at the end of the day will determine that - and right now the market is blind and I feel it wise to be mildly optimistic and at the same time very very cautious...
