Playing Defense With Cloud Software Stocks

The main risk to cloud software during a less-than-ideal economy is downgrades and churn. Signing new customers can also be a challenge. How a company is faring will often show up in net retention rates.

Net dollar retention rate is a key metric in software-as-a-service (SaaS) that has generated a lot of buzz over the past 10 years or so. This is because it helps to predict cash efficiency for subscription-based models by calculating the inflows of revenue and upgrades minus the outflows of downgrades and churn. The benchmark that SaaS companies are shooting for is between 100% and 106%. Exceptional companies report above 120%. Sammy Abdullah did a great write-up of this in Crunchbase.

Key metrics like net dollar retention rate come from venture capital deals where the goal is to exit through the public markets or through an acquisition. This key metric is helpful to consider, but it also fizzles out over time. Venture capitalists are less concerned with the long-term growth of a company as they have already exited by the time subscriptions see serious churn.

Box (NYSE:BOX) is a great example of this as the company has been on the public market longer than most cloud software companies (although still a relatively short time of five years). Despite having an ideal net retention rate, the company’s revenue growth has declined.

2U (NASDAQ:TWOU) previously held the record for net retention at 144%. Revenue peaked at 44% year-over-year growth in 2019 and now stands at 39.5% year-over-year growth. The stock price has correlated with this growth, and the company is trading well beneath all-time highs of $98 with a current price of $35.

Recently I published on whether we would see another dot-com crash considering the high valuations in tech despite a questionable economic backdrop. The main takeaway

SpaceX receives contract to build missile tracking satellites for the Defense Department

Yesterday, SpaceX received a contract worth more than $149 million from the Space Development Agency (SDA), tasking the company with building a new satellite for the US military capable of tracking and providing early warnings of hypersonic missile launches. Another company, L3 Harris out of Florida, was given more than $193 million by the agency to also build tracking satellites.

The satellites are meant to be the first crucial part of the SDA’s Tracking Layer Tranche 0, which is designed to provide missile tracking for the Defense Department from space using infrared sensors. SpaceX and L3 Harris will together build eight satellites to deliver to the DOD for the Tracking Layer — the first satellites in a planned constellation.

The Tracking Layer will work in partnership with the SDA’s proposed Transport Layer, another planned constellation of between 300 and 500 satellites that will provide “low-latency military data and connectivity worldwide” to military assets. Both layers will be able to communicate with one another through intersatellite links. That way, any data that the sensors pick up in the Tracking Layer can quickly be disseminated to personnel on the ground. Lockheed Martin and York Space Systems both received contracts to develop the initial satellites for this Transport Layer.

This is the first time SpaceX has been granted a DOD award to build satellites. The company is quickly growing its own satellite flight with its Starlink constellation — a proposed constellation of nearly 12,000 satellites intended to beam broadband internet connectivity down to users on Earth. To win this SDA award, SpaceX bid a satellite concept based on its Starlink design, Space News reports.

“We are confident these fixed-price awards will help us deliver the initial tranche of the Tracking Layer on schedule,”

Defense and Intelligence Executive Melvin Cordova Joined Tachyum Government Corp.

Tachyum Inc. today announced that it has added Melvin Cordova, a veteran and proven executive in the defense and intelligence technology industry, to the advisory board of its newly created Tachyum Government Corporation. Mr. Cordova carries the appropriate security clearances and will serve as the official contact for federal customers looking to leverage Tachyum’s Prodigy Universal Processor for their demanding HPC, artificial intelligence and machine learning workloads.

With more than 30 years of experience leading military and intelligence innovation, managing critical programs, and building consensus within the defense and intelligence industries, Cordova specializes in providing operational advisory services to technology companies doing business with the Department of Defense and intelligence community organizations. His focus is on identifying emerging threats and managing the velocity and complexity of technology innovation for high-stakes environments to counter those threats.

Cordova served 22 years on active duty in the United States Navy, in the fields of electricity, electronics, and interior communications. Among his professional experience, he served eight-years as a GG-15 at the Defense Intelligence Agency (DIA), in roles that include; Secretariat for the Innovation Advisory Board, Office of the Deputy Director; Senior Program Manager for the Technology Action Group, Office of the Chief of Staff, DIA, addressing the most difficult problems of IT, Analysis, MASINT, and HUMINT. Cordova led DoD’s investments in In-Q-Tel’s (CIA’s Venture Capital arm) portfolio companies, managed DIA participation in military exercises and led the transition of several important technologies to fully qualified operational use. These efforts earned him recognition from the Director of National Intelligence (DNI) for his collaboration and leadership. Cordova also served 3-1/2 years in the Defense HUMINT Management Office, Technology Tradecraft Office, as senior program manager, deputy chief and acting chief. He also served as Chief of the DIA Contracting Office in Baghdad, Iraq, providing oversight

General Dynamics gets $1.2 billion to build short-range air defense systems for US Army

WASHINGTON — General Dynamics Land Systems has secured a $1.2 billion contract at the close of the fiscal year to build and deliver the U.S. Army’s Interim Maneuver Short-Range Air Defense (IM-SHORAD) system.

The Stryker combat vehicle-based system includes a mission equipment package designed by Leonardo DRS. That mission equipment package includes Raytheon’s Stinger vehicle missile launcher.

The estimated completion date of the contract is Sept. 30, 2025, according to a Defense Department contract announcement.

Work locations and funding will be determined with each order.

GDLS officials told Defense News on Oct. 1 that the initial order for the contract is for 28 vehicles and the company has begun ordering material and laying out production for those vehicles.

The first vehicle under this contract will roll off the line in roughly 18 months, but the first platoon will be fielded in March 2021 and the first battalion (of 32 vehicles) will be fielded in September 2021 using prototypes already built to fill it out.

A second battalion will be fielded in 2022.

The Army wrapped up developmental testing for the SHORAD system after experiencing a minor “hiccup” that, when paired with complications due to the coronavirus pandemic, set the program back by a few weeks, Maj. Gen. Robert Rasch, the service’s program executive officer for missiles and space, said Aug. 5.

The production contract award came on time.

It took just 19 months from the time the service generated the requirement to the first delivery of a platform for testing, answering an urgent call in 2016 from U.S. Army Europe to fill the short-range air defense capability gap. The service received the requirement to build the system in February 2018.

After a shoot-off in the desert of White Sands Missile Range, New Mexico, and subsequent evaluations of various vendors, the

Microsoft releases Digital Defense Report detailing increasingly advanced cyberattacks

There’s been a surge in cybersecurity activity as companies continue to operate remotely and cybercriminals look to exploit the ongoing coronavirus pandemic.

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Image: Microsoft

To mitigate the spread of COVID-19, organizations around the globe have also adopted remote work policies, leaving companies vulnerable to threats via remote networks, pandemic-related malware, and more. In recent months, there’s been a spike in cybersecurity attacks during the pandemic. In April, the FBI reported cybercriminal activity had increased fourfold. At the time, the agency’s Internet Crime Complaint Center was receiving up to 4,000 complaints per day. On Tuesday, Microsoft released its annual Digital Defense Report providing a glimpse of the trends shaping the cybersecurity landscape during the last year.

“This report makes it clear that threat actors have rapidly increased in sophistication over the past year, using techniques that make them harder to spot and that threaten even the savviest targets,” said Tom Burt, corporate VP of customer security and trust, in the report.

SEE: Identity theft protection policy (TechRepublic Premium)

The Digital Defense Report analyzes cybersecurity threats from the second half of 2019 through the first half of 2020. Overall, Microsoft said it blocked more than 13 billion “malicious and suspicious mails” in 2019, with over 1 billion of these being “URLs set up for the explicit purpose of launching a phishing credential attack.”

From October of last year to July 2020, ransomware existed as the most common action spurring Microsoft’s incident response, per the report. Microsoft notes the ever-evolving and broadening nature of IoT threats, stating that such attacks increased by more than one-third “in total attack volume” when comparing the last six months of 2019 to the first half of 2020.

The findings detail ways in which cybercriminals have attempted to exploit the coronavirus pandemic. For example, a total of 16