At Microsoft’s Ignite conference yesterday, WANdisco co-presented an embedded solution with Azure, effectively announcing Microsoft as the ‘major enterprise cloud partner’ referenced in WANdisco’s 15 July press release. While investors had speculated that Microsoft was the partner, public confirmation that the leading enterprise cloud provider globally is embedding Fusion within its platform clearly demonstrates the value of WANdisco’s technology. It should also reassure investors that the relationship is progressing.
Microsoft’s Azure is the largest enterprise cloud platform globally and is also one of the fastest growing (15% Infrastructure as a Service market share and 61% y-o-y growth in FY18 according to Gartner). By embedding Fusion, Azure will be able to offer customers guaranteed data availability at scale and across any location. This guaranteed consistency helps enterprises accelerate and de-risk their move to the cloud. For WANdisco, being embedded at Azure means it becomes a de-facto standard, offering significantly greater revenue potential and visibility without additional cost.
The press release references the Microsoft relationship becoming revenue generating in FY20 and the company confirms that there have been no delays to the timing of commercial launch since WANdisco’s interim results (September). The timing is also consistent with our forecasts which envisage 70% y-o-y revenue growth in FY20 driven by this partnership and others (see Databricks, Neudesic). However, the risk to FY19 guidance ($24m, implying h-o-h trebling of revenues to $18m in H2) is arguably rising slightly. The absence of large contract win announcements in the last seven weeks suggests the company still has a lot of business to close in the next two months. As no material contribution from Microsoft was factored into our FY19 estimates and WANdisco’s revenues are always backend loaded, we leave our forecasts unchanged at this point.