Braze, Inc. Grapples with Challenges of Remote Workforce and Reliance on Third-Party Providers

As the global workforce and service delivery continue to evolve, companies like Braze, Inc. (ticker: BRZE) are facing the possible risks and challenges associated with remote work and dependence on third-party providers. In this article, we take a closer look at the potential threats and obstacles this prominent customer engagement platform may encounter, based on the company’s recent SEC report.

The Shift to a Remote and Hybrid Work Model

In September 2022, Braze implemented a hybrid work model called “The Way Braze Works,” allowing employees to work remotely, on-site, or in a combination of the two. While the company hopes this model will enhance its financial and operational results, there is uncertainty regarding the long-term impact of such a shift.

Managing remote employees may prove more difficult for the company, potentially leading to a loss of company culture, increased employee attrition, and a negative impact on research, development, and growth. The remote workforce may also heighten the risk of privacy and data security breaches involving company or customer data.

Additionally, Braze runs the risk of facing regulatory claims as remote employees establish a presence in previously unrecognized jurisdictions, which could subject the company to tax and employment claims.

Reliance on Third-Party Providers

Braze’s platform interacts with consumers through different channels, including emails, SMS, mobile, and web notifications. The company relies on third-party services to deliver emails and SMS, as well as Apple and Google services for mobile and web notifications. Any disruption in these services, such as service outages, changes to policies, or cybersecurity events, could result in customer dissatisfaction, harm the company’s reputation, and adversely affect its financial conditions and results of operations.

Dependence on Mobile Operating Systems

Braze’s platform relies on popular mobile operating systems like Android and iOS for notification delivery. Changes in these systems, including anti-tracking features or other policy reforms, could limit or degrade the functionality of Braze’s platform and ultimately affect its bottom line. Similarly, as new mobile devices and platforms emerge, there is no guarantee that these will continue to support Braze’s platform or effectively roll out updates to their customer applications.

Outsourcing Infrastructure to Third-Party Hosting Providers

Braze outsources a significant amount of its cloud-based infrastructure to third-party providers, such as Amazon Web Services (AWS). This reliance on cloud computing poses potential risks in the event of disruptions, limitations on capacity, or other interruptions in the serviceability of these third-party providers, any of which could have negative consequences for the company’s ability to onboard new customers, expand existing customers’ usage, and maintain overall operational capabilities.

In conclusion, in an ever-evolving digital world, companies like Braze, Inc. must navigate the challenges associated with a remote workforce and reliance on third-party providers. The transition to a hybrid work model, dependence on mobile operating systems, and outsourcing infrastructure all present potential risks to the company’s financial and operational results. As a result, it is crucial for Braze and other companies in a similar position to remain vigilant and adaptable in the face of these uncertainties and an ever-shifting landscape.

Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!