Varonis An Interesting Play On New Corporate IT Demands And Threats

Enterprises generate tremendous amounts of data and collecting, aggregating, interpreting, and securing it is a major set of challenges for IT departments. Varonis (NASDAQ:VRNS) is an interesting take on that reality, as well as the increasing realization that sometimes the greatest threats to a company's IT/data security come from within, as the company's platform of products is designed to collect, analyze, and help manage large amounts of user-generated unstructured data that exist within a corporate/enterprise IT environment.

Varonis shares are up about 50% over the past year, but still more than a third below their debut price, as the company has had its challenges living up to initial expectations regarding license growth and margin leverage.

Although Varonis's addressable market may well be quite large (multiple billions of dollars), operating leverage is a tricky question and competition from large established players like Symantec (NASDAQ:SYMC) and Dell, not to mention small upstarts, is unlikely to lessen from here. Taken in the context of growth software stories, Varonis isn't that expensive, though, and the tight bunching of sell-side expectations leads me to think that the shares could react strongly to surprises (good or bad).

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Varonis An Interesting Play On New Corporate IT Demands And Threats

Investopedia: Splunk Delivering When Other Techs Are Not

It's hard for a company to completely shield itself from a difficult macro climate, but having a solid product for a burgeoning (and heretofore untapped) market is a pretty good way to try. To that end, Splunk's (Nasdaq:SPLK) machine data processing software/services are giving companies capabilities they haven't had before, and they seem willing to pay for it. While the valuation here looks pretty heated, I can appreciate the appeal of a high-growth stock at a time when many other techs have stalled.

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http://www.investopedia.com/stock-analysis/053113/splunk-delivering-when-other-techs-are-not-splk-hpq-ibm-swi-tibx.aspx

Seeking Alpha: Splunk - The Next Google Or The Next Goner?

Whenever a new company emerges with a target market that is ill-defined, both the bulls and bears dig in and get to work with their respective promotion machines. That brings us to Splunk (SPLK). Can the company's technology and platform for collecting, processing, and analyzing machine data make it a Google (GOOG) of log and config files, or will it just prove to be another not-so-spectacular systems management tool, and one unworthy of a high teens multiple on sales?

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Splunk - The Next Google Or The Next Goner?