There's little doubt that the pandemic has accelerated the digital transformation, a trend that was already firmly established. Some of the principal beneficiaries of the migration to the cloud have been companies that provide software-as-a-service (SaaS) platforms. These cloud-native solutions allow businesses to access and use this software from anywhere, while also providing customers with easy-to-access solutions to age-old problems.
On this clip from Motley Fool Live, recorded on Feb. 8, "The Wrap" host Jason Hall, Fool analyst Auri Hughes, and Fool.com contributor Danny Vena discuss two of the hottest niche SaaS offerings around and why they could be big winners for investors.
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Danny Vena: I've got a question here from Sheri, says, "Danny, do you like BlackLine (BL -2.33%) or nCino (NCNO) better for the long term?"
Just really quickly, BlackLine is a company that works in accounting and finance departments and helps with the process of month-end or period-end close. Essentially, taking the process of reconciling your checking account and automating it, for essentially every account on the balance sheet or income statement.
nCino is a company that operates back-office software, essentially software-as-a-service for banks. It allows them to onboard new customers and also open accounts, customer service, and all those things for the bank.
I don't like to say one or the other. If I had to choose, I'd say BlackLine, but that's part of my bias from being an accountant. I think both of those companies are good niche software-as-a-service plays. I think investors would do well by holding either one or both of them.
Auri Hughes: I'll throw in two cents about BlackLine, I haven't looked at it yet, but it is one I am very seriously considering. Not exactly a background in accounting, but I do have a background as a financial analyst.
Every major company, corporation has an accounting department, and they have to reconcile books, that is pretty universal. I think technology like this just has huge application, especially as it becomes adopted. I don't want to say it's recession proof, but accounting is probably going to want to be one of the last departments to go or cut down on. It's very interesting to me. I think your interest is definitely justified.
Jason Hall: I tell you, Auri, if you ever want to learn about it, just show up here around earning season and Danny won't shut up about the company. [laughs] He loves it.
Vena: Or follow Jim Gillies on Twitter.
Hughes: Danny, is this one of your favorite stocks? Is this one you really like a lot?
Vena: This is a good one. I don't think it's going to be the scale of some of these other software-as-a-service plays, but as a niche play, it's definitely a winner.
