ZenDesk announced today its plans for its an initial public offering (IPO) that would value the company at around $632 million. The company hopes to raise about about $90 million in its IPO.
ZenDesk provides a cloud based Web / mobile help desk and customer self-service platform.
Should you invest in ZenDesk?
And why does a ZenDesk IPO matter to higher education?
To the first question, should you buy ZenDesk shares, I have no idea. Anyone who can’t afford to lose all their money on any investment probably shouldn’t be buying individual stocks. Stick to low fee index funds.
If you are investing, however, I would say that the ZenDesk valuation makes some sense to me. Why? Because I have been a ZenDesk customer.
I think that the platform is both elegant and fills an important need in support, help desk, and customer self-service. As a cloud platform ZenDesk is easy and affordable to spin up, while providing a robust feature set and a well-designed user interface. The analytics are powerful and easy to use. The platform works well for small work groups and seems to be extensible and flexible. The company is easy to work with and the support for the product (as you’d probably expect) is excellent.
Why does ZenDesk and its IPO matter to higher ed?
I think that we are going into some dangerous territory with educational technology. Ridiculous valuations and acquisition prices for low-revenue producing social media and gaming companies has confused market signals in the tech space. When a Yahoo pays $1.1 billion for a Tumblr, or Facebook pays $19 billion for WhatsApp and $2 billion for Oculus VR and $1 billion for Instagram, we have divorced investments from reality.
Crazy valuations make it difficult to properly value legitimate businesses. When the company is a Web company building a cloud based service it gets even more difficult to understand the fundamentals of long-range value.
ZenDesk seems like a good bet because they solve a real need, they have real customers paying real money to use their service, and the market potential for a SaaS (software as a service) Web help desk platform is largely untapped.
In higher we need to move towards pushing as much of our non-core (non teaching and research) technological infrastructure to the cloud. We will be better off when we can rent rather than run these services. We want to move our infrastructure costs away from fixed and towards variable as much as we can.
Today, for a host of security and quality of service reasons, we still need our campus data centers. We need to run some of our most important applications and store some of our most important data onsite.
In the future I’m hoping that will all change. I’m hoping that our future is cloud based student information systems (SIS) and cloud based financial systems. That we find ways to move our data to the cloud.
I hope that in my edtech career that I see the disappearance of the campus data center.
Companies like ZenDesk, even if we don’t quite see it, will help us along that path.
The ZenDesk valuation and IPO makes sense to me.