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One Thing is Clear: AI Makes a Lot of Business Software Look Awfully Expensive Today. Is Deflation Coming?

SaaStr

50 cents of compute for 500 dollars of value — Sam Altman (@sama) February 3, 2025 So just how much will AI remake classic B2B software? And in Classic B2B you are raising my prices this quarter again ? We are still learning. On the one hand, new AI-first entrants are rocketing to $10m ARR in a year. That do 10x as much.

AWS 291
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AI is Already Remaking SaaS. 10 Trends To Watch Right Now. And Not Fall Behind On.

SaaStr

AI is already reshaping B2B SaaS, and its only going to accelerate. And everyone I work closely with in B2B with a large AI cost base (Gorgias, Opus Pro, etc) has already figured out how to be smarter and bring costs down 80% or more. #6. We talk a lot about copilots, but in many cases they are just a new version of chat in B2B.

AI 146
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58% of You Say Sales Cycles Are Even Longer in 2024

SaaStr

SaaS outside of classic “B2B’ is often holding up well. And AI is obviously on fire, pulling up AWS, Google Cloud, Azure, etc. But classic B2B SaaS is definitely in many cases seeing tougher times. Things in “classic B2B” haven’t bounced back to easier yet. Klaviyo, Toast, etc.

Azure 297
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BowtiedCocoon: Top SaaS SMB AEs have $125k OTEs. But The Best Ones Make $261k.

SaaStr

Per LinkedIn data, SMB AEs at some of the top SaaS and B2B companies have: an average base salary of $70k, an average OTE of $125k, and. Sales Organization 1 Miro 2 Okta 3 Arctic Wolf 4 Sprout Social 5 Google 6 Clickup 7 Cisco Meraki 8 Microsoft 9 Klaviyo 10 AWS 11 Rippling 12 Fivetran. And it’s super helpful.

SMB 334
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Is it Really ARR? In 2021+, Yes. As Long As NRR is > 100%

SaaStr

A lot of our SaaS older times don’t quite know what to make with a lot of B2B startups these days, let alone some public SaaS companies. First, Snowflake rolls its large customers into fixed comittments (as does AWS and many others), and bills them in advance. Doesn’t ARR stand for Annual Recurring Revenue?

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Thanks to Multiplier, Pepper, Tin Men Capital, and To the New’s CloudKeeper for Sponsoring SaaStr APAC 2023!

SaaStr

CloudKeeper from TO THE NEW, is a cloud spend optimization solution that guarantees to cut down your AWS bills by 5-15%. With CloudKeeper, we have helped 200+ of our customers optimize their AWS spend with a guaranteed reduction in their AWS bills. Join these incredible companies to experience all the value of SaaStr!

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The State of Subscription Apps with RevenueCat’s CEO Jacob Eiting and Growth Advocate David Barnard

SaaStr

A lot of you reading SaaStr are probably more B2B SaaS oriented and may not be paying attention to the consumer market, but it’s already massive and is continuing to grow quickly. So, let’s look at the state of subscription apps and how B2B SaaS can learn from it. In B2B, the classic metric for this is 2% now and was 2% in 2006.