Business intelligence (BI) and analytics is a big, crowded market. Domo (NASDAQ:DOMO) wants you to believe its technology will not only change the market, but also change the way businesses analyze and consume information.

"On a typical business day, our customers in the aggregate query between 100 trillion to 200 trillion rows of data. Even with this volume of data, we maintain a sub-second average query response time," CEO and founder Josh James said on the fiscal third-quarter earnings conference call.

If that sounds like an accomplishment...it is. But is it a big enough breakthrough to make Domo a rule-breaker? That's much tougher to say.

A dashboard of metrics from Domo

Image source: Domo.

Differentiating Domo

Here's why. As great as the technology appears to be -- and the case studies speak volumes -- Domo has had a tough time accelerating revenue growth past 30%. Its closest competitor, privately held Looker, reported 70% growth in 2018 alone. Domo is guiding for 29.9% revenue growth in the just-completed fiscal year.

Domo is the bigger company at just over 800 employees, while Looker ended 2018 with about 600. The 25% headcount delta between the two similar companies suggests Looker, too, is either nearing or past the $100 million revenue mark. (Domo is on track for roughly $141 million in fiscal 2019 revenue.)

Why is one growing so much faster than the other? Honestly, it's tough to know. But the most recent Gartner Magic Quadrant for analytics and BI puts Looker well ahead, and both companies behind publicly traded specialists MicroStrategy and Tableau Software.

Blazing the trail to profitability

A lower-left ranking in the Gartner MQ -- placing Domo as a "niche player" challenging the leaders -- isn't a good look for Domo, and neither are the current numbers. Decelerating revenue growth isn't a good sign, coming off last year's initial public offering. It's also tough to reconcile the slowdown with Domo's claim to "significant improvement in sales and marketing productivity" in the third quarter.

What executives mean is that Domo is spending less on sales and marketing to achieve (almost) the same level of revenue growth. It's good spin, and it's true: Domo's gross margin in fiscal Q3 was 8.7 percentage points better than in last year's fiscal Q3. Cutting sales and marketing spend by almost 30% this year -- from $39.7 million in fiscal Q1 to $28 million in fiscal Q3 -- has had a dramatic impact, especially on the balance sheet and cash flow statement. Total cash burn (cash used in operations plus capital expenditures) fell from $35.7 million in fiscal Q1 to just $32.2 million in fiscal Q3.

Six quarters to make me a believer

Frankly, it don't find it difficult to believe in Domo's technology. Combining data integration techniques such as ETL (extract, transform, load) with simple SQL-based querying, while presenting trillions of rows of data in visually appealing cards and making it all accessible on any smartphone, is a solid pitch. Or at least it should be.

The trouble is that not enough potential customers appear to believe Domo is fundamentally different from other analytics and business-intelligence alternatives, which makes the platform difficult to sell. It's hard to accelerate growth when your underlying technology doesn't stand out without testing the software via a lengthy proof-of-concept process.

That's why I don't think Domo is a rule-breaker -- yet.

The elements are all there for it to be. Engaged leadership (James owns 12.8% of the shares outstanding), strong technology, and a big vision (to deliver real-time analytics and BI at scale on a smartphone), make Domo interesting. So does the valuation. Looker just took in $103 million at a $1.6 billion valuation. Domo would net at least that much in a buyout offer, resulting in a doubling from today's prices.

Of course that assumes that James is right that Domo is "fully funded" despite the current cash burn rate. I estimate his company has about six quarters to start generating cash on its own, or face raising fresh capital and diluting existing investors. So if there's good news to be had -- and I hope there is, because I'm rooting for Domo -- it'll be coming soon.