SAP and Or­a­cle swat at the star­tups

Both have ded­i­cated most of their ac­qui­si­tion bud­gets to cloud­based com­pa­nies. In re­cent years, spe­cial­ized com­pa­nies such as Sales­ and Work­day have dom­i­nated the mar­ket for cloud- based hu­man re­sources, cus­tomer relations, and lo­gis­tics soft­ware

Bloomberg Businessweek (North America) - - Focus On/The Cloud - -Adam Ewing Edited by Cristina Lind­blad

cost for a store is about quadru­ple what a pri­vate lis­tener pays for Spo­tify, and Sound­track keeps half of that, vs. the 30 per­cent of sub­scrip­tion fees Spo­tify pockets. “The mar­ket is su­per-frag­mented and dys­func­tional,” says Sars, clad in a T-shirt in Sound­track’s min­i­mal­ist head­quar­ters in Stock­holm. “No­body had a sim­ple cloud-soft­ware dis­tri­bu­tion so­lu­tion.”

Many smaller re­tail­ers and restau­rants don’t know they’re break­ing the rules when they pipe in mu­sic from con­sumer stream­ing ser­vices, Sars says. By stream­ing songs on­line and of­fer­ing a sim­ple in­ter­face, Sound­track can win small busi­nesses in the same way Ap­ple’s itunes weaned cus­tomers off pi­rate mu­sic sites. “You need to be able to dis­trib­ute the ser­vice in an ef­fi­cient way, and if it’s ac­ces­si­ble on­line then there’s a huge mar­ket,” says Sars, who helped cre­ate Beats Mu­sic, the stream­ing ser­vice Ap­ple bought in 2014 for $3 bil­lion.

Sound­track has raised about $20 mil­lion from back­ers in­clud­ing Spo­tify, Swedish phone com­pany Telia, and U.S. com­mer­cial stream­ing provider Playnet­work. As Sars spends that money on a global ex­pan­sion, he’ll face a host of com­peti­tors. The mar­ket leader is Mood Me­dia, which ac­quired Muzak in 2011 and re­tired the name two years later. Al­though Mood is far larger— it serves more than 300,000 lo­ca­tions—it’s los­ing money and is re­struc­tur­ing to pay off debt. It launched its own stream­ing ser­vice, Mood Mix, in 2014, giv­ing users ac­cess to mil­lions of songs and pro­gram­mable playlists, but most of its cus­tomers still get their mu­sic ei­ther on CDS de­liv­ered by mail or via satel­lite or the In­ter­net. At least a dozen smaller play­ers, such as Touch­tunes Mu­sic and Image­sound, pro­vide sim­i­lar stream­ing ser­vices, but Sound­track has a clear edge, says Si­mon Dyson, an an­a­lyst at Ovum, a tech­nol­ogy con­sult­ing firm in Lon­don. With Mcdon­ald’s, he says, Sound­track has a “spring­board to much big­ger things.”

The bot­tom line Swe­den’s Sound­track aims to un­seat leader Mood Mu­sic with its cloud-based ser­vice stream­ing back­ground mu­sic to busi­nesses.

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