WANDisco has signed a deal to embed its Fusion technology within the migration and replication platform of a major enterprise cloud partner. We see this as a significant announcement that highlights the strategic value of its technology within the cloud ecosystem. Although details on the financial contribution are not yet provided, we expect it to lead to a big uplift in revenue from this partner.
In Accelerating the customer cloud journey, we highlighted that WANdisco remained confident of securing a ‘strategic deal’ with a major cloud player. By jointly developing a ‘frictionless’ migration and replication product, WANdisco will be embedding its Fusion technology in the platform of this cloud partner. Its selection emphasises the unique value of Fusion – guaranteed consistency helps enterprises accelerate and de-risk the move to the cloud. Commercial release of the product is expected before the end of 2019.
We also highlighted that our FY19 revenue forecast included a $7.5m contribution from concluding a strategic deal. No financial details of the deal have been given yet so we make no changes to numbers at this point. Based on previous conversations with the company we believe this partner could provide substantial minimum revenue commitments and will cover a large proportion of the joint product development costs incurred in FY19. However, given the timing of commercial release, customer revenue may not kick in until FY20.
WANdisco’s shares have fallen since the capital raising in February and currently trade at c 6x FY20 EV/sales. Consummation of this deal removes uncertainty and highlights both the substantial growth potential of its technology and its strategic value in the cloud ecosystem.