Hightail to a Defensible Niche

It’s hardly news that enterprise file sharing technology has become commoditized. That process has very visibly played out in the tech media over several months now. However, most of the articles written have assumed that pure play file sharing startups have a bleak future, if any, as Microsoft, Google, Citrix and other platform vendors continue to commoditize both functionality and pricing.
Reality begs to differ. Box has convincingly moved beyond commodity file sharing by offering ready-made, industry-specific solutions and a developer platform chock full of APIs for organizations that prefer to build their own applications using Box technology. Accellion and Egnyte have focused on the sharing of content in hybrid environments that combine cloud-based and on-premises file storage.

Hightail Makes Its Move

Hightail is another enterprise file sharing pure play that was supposed to be put out of business as a result of market consolidation. It too is still standing and has just announced a new offering, called Spaces, that essentially repositions the company from commodity file sharing to content-based collaboration for creative professionals.
Spaces is an attempt by Hightail to help people who work at ad agencies, film and music studios, and in Marketing departments to not only share, but also to give and get feedback on audio and visual files. Collaborators can make annotations directly on visual files and comment in-context of one of its elements. Comments on audio and video files are also made in context, as they appear in the track’s timeline.

Spaces is really a project management tool for creatives, albeit one with only lightweight task management functionality. Individuals can establish a collaborative space in which the creative artifacts related to a specific project are shared, annotated and commented on, and distributed in final form. There is also a dashboard that lets the owner/administrator of the space monitor activities taken by it members on its assets, including comments made and downloads of files.

Darwin’s Theories at Work

Hightail is a clear example of Charles Darwin’s theories of evolution and specialization at work. From its inception (as YouSendIt, in 2004) the company has evolved from a provider of technology for sharing large digital files to one that also stored those files in the cloud. Now Hightail is specializing to ensure its continuing existing. Its CEO, Ranjith Kumaran, recently acknowledged that roughly 80% of the company’s revenue comes from creative agencies and firms, so focusing the company to serve those customers was a logical move.
Hightail is certainly not the first company to start as a purveyor of a general technology and then specialize to survive. It’s not even the first in the context-centric collaboration space. As noted above, Box has also created industry-specific solutions. The real question is whether or not this pivot will provide Hightail with a niche that is large enough for the company to not only sustain its current level of operations, but to grow as well.

We’ve Seen This Movie Before

Central Desktop may well serve as a historical example of Hightail’s future.  In 2011, Central Desktop launched SocialBridge, a new offering that repositioned the company from the generic social collaboration space to the same niche that Hightail has selected – creative and marketing agencies. While Central Desktop saw some success and growth as a result, it sold itself three and a half years later to PGi, who wanted to augment its existing solution for real-time meetings into a more holistic collaboration offering.
Hightail’s evolution may take a similar path. Adobe could combine assets from its Creative Cloud and Document Cloud offerings to create something similar to Hightail Spaces, but Adobe could also choose to buy Hightail. One of Adobe’s traditional foes, such as Corel or Quark, could acquire Hightail in an effort to better compete Adobe. It’s even possible that Apple could want to buy Hightail to augment its existing offerings for creative professionals.
Whatever happens to Hightail down the road, they’ve made a move this week that they needed to do to stick around a while longer as an independent company. They’ve also demonstrated that generic file sharing has become completely commoditized and that evolutionary specialization will be required of all the other pure play enterprise file sharing vendors if they want to continue in business.

Two charts that show why Uber’s valuation isn’t ridiculous

Uber’s latest funding brings the company into the stratosphere of private company valuations.

At $40 billion, Uber is believed to be four times more valuable than Airbnb, Snapchat, Palantir or Dropbox. Its valuation is eight times larger than Pinterest’s, fifty-seven times larger than Lyft’s, 100 times larger than Instacart’s.

The news sent the tech world into a tizzy. People called Uber’s new valuation eye-popping, ridiculous, absurd. Just like Uber’s last round of funding, it was heralded as proof of a bubble, an upcoming crash, the tech apocalypse, etc.

[dataset id=”898119″]

But when you plot Uber’s valuation compared to big public tech companies, it looks less dramatic. [company]Amazon[/company], [company]Facebook[/company], [company]Microsoft[/company], [company]Amazon[/company], [company]Oracle[/company] and others are — as you’d expect from mature companies — much larger by market cap than Uber’s current valuation. Twitter is much smaller. Investors are essentially saying that they think Uber will be nearly as valuable as [company]Yahoo[/company] or [company]eBay[/company] and more valuable than Twitter when it goes public. It’s not a totally outlandish conclusion for them to bet on, given current tech hype and market trends.

Uber’s staggering valuation says more about the changing nature of tech fundraising than it does about Uber investors’ ridiculousness. Companies are staying private longer, choosing to develop their product outside of the prying public market’s eyes. Uber is leading that trend, a pioneer for a new kind of growth model.

Without much precedent, it’s hard to know what Uber’s eventual IPO will look like. It has more money and time to hone its business, so it’s not entirely fair to compare is to the IPOs of yesteryear and call its valuation outsized. We’re playing by a new set of rules.

[dataset id=”898108″]

There’s another way to look at Uber’s valuation. CEO Travis Kalanick isn’t content for his company to remain a car-hailing app. He plans to move into urban logistics and shipping, doing everything from delivering food to transporting supplies. When Uber drops off kittens on National Cat Day, it’s not just a publicity stunt — it’s logistics testing.

On that note, perhaps Uber should be compared to public transportation, logistics and automotive corporations. Companies like [company]Ford[/company] and [company]Tesla[/company] are distant cousins to Uber, but given that Kalanick wants Uber to replace car ownership, they may be competitors down the line. The same goes for [company]FedEx[/company] and [company]UPS[/company].

Uber’s valuation puts it at less than half the market cap of UPS, but close to the market cap of FedEx ($51 billion). From an automotive standpoint, the numbers are even more optimistic, with Ford and [company]General Motors[/company]’ market caps not that much bigger than Uber’s valuation. Tesla and Hertz’s market caps, $29 billion and $11 billion respectively, are smaller than Uber’s $40 billion valuation.

Uber’s investors are essentially saying that they think when the company goes public, it will be worth at least half as much as GM and Ford and more than Tesla and Hertz.

[dataset id=”898118″]

Context is king in mobile advertising, as InMobi snaps up Overlay Media

The takeover will not stop Overlay’s hush-hush work with handset manufacturers, which should see exciting new context-awareness features added to smartphones soon. Meanwhile, the choice of new CEO at rival Madvertise also highlights the important of tech innovation in the mobile advertising arms race.