Tom Tunguz

FEBRUARY 2, 2023

A year ago, AWS, GCP, & Azure averaged 44% annual growth. Amazon: We expect [customer] optimization efforts will continue to be a headwind to AWS growth in at least the next couple of quarters. So So far in the first month of the year, AWS year-over-year revenue growth is in the mid-teens.

GCP(Google Cloud Platform) 307

GCP(Google Cloud Platform) Cloud AWS Sales Hiring 307

SaaStr

APRIL 24, 2021

So many startups these days are claiming they have “ARR” from revenue that … doesn’t recur. Doesn’t ARR stand for Annual Recurring Revenue? ARR now really means revenue with 100%+ Net Revenue Retention. 50% revenue from software (recurring), 50% from payments (not-recurring). .

Merchant Services 360

Merchant Services SaaS Payments Payment Solutions Payment Services 360

Tom Tunguz

JULY 24, 2024

Wherever the biggest dataset resided, customers ran their compute workloads that generated all of the profit and revenue growth for the last generation of data companies. AWS & others have stopped charging to move data. AWS cut prices more than 100 times in its first five years. Today, the battle is for AI gravity.

AI 297

AI Artificial Intelligence AWS Innovation 297

SaaStr

DECEMBER 7, 2020

3. “Atlassian and AWS Say: Maybe Worry a Little Bit. Atlassian and AWS, two of the greats, may hold a clue: Atlassian and AWS Say: “Maybe Worry a Little Bit” 4. “A Framework For Your First SaaS Sales Comp Plan” A SaaStr Classic, still going strong in 2020. . Even If It Isn’t Revenue.”

Venture Capital 335

Venture Capital Sales Hiring AWS Cloud 335

Clouded Judgement

MARCH 28, 2025

To make this concrete - if a company got to say ~$25-50m in revenue (I’m making this number up, it’s just illustrative), someone else who is considering competing might be persuaded against it. By the time they got their competitor up and off the ground, that first mover may already be at $100m+ in revenue and at escape velocity.

AI 184

AI Cloud Scale Scaling 184

SaaStr

MAY 16, 2022

So follow AWS, Azure and Google Cloud. Let’s look a whole level up to the real canaries-in-the-coalmine: AWS, Azure and Google Cloud. And AWS grew 37% at a $74B run-rate , down a bit from 39% the prior quarter but still adding an insane amount of new revenue. If they stumble, we’re in for a rough patch.

Cloud 293

Cloud Azure AWS Engineering 293

Clouded Judgement

JUNE 19, 2024

The charts below show the change in quarterly revenue YoY (so Q1 ‘24 rev - Q1 ‘23 rev) going back to 2017. It’s worth pointing out that Azure is a bit above the long term trendline, while AWS is still below (but accelerating up). Beating consensus revenue estimates is the first aspect of a successful quarter.

Cloud 318

Cloud GCP(Google Cloud Platform) Software Azure 318

Tom Tunguz

OCTOBER 26, 2023

This drop in prices has grown AWS into a $90b revenue business in 17 years. Compare that to AWS’ managed database, Aurora, which charges $0.0000002 per request. (I’m Database Cost per Transaction in $ Cost Multiple Relative to AWS AWS Aurora 0.0000002 1 Ethereum Peak 37 185m Ethereum Today 2.67

Blockchain 273

Blockchain AWS Pricing Innovation 273

SaaStr

FEBRUARY 20, 2021

But are AWS, Azure and Google Cloud just too big for us to learn from? Google Cloud sees Cloud revenues tripling in the next 5 years. You can see that here vividly, with Google Cloud having a $30B backlog of signed revenue on top of its $13B in ARR. The power of recurring revenue and multi-year, long-term customers.

Cloud 294

Cloud Azure AWS Scale 294

SaaStr

JUNE 4, 2022

But a few thoughts on “the hardest part” for the first few stages: From $1-$100k in ARR, the hardest part is often how little revenue you get from each customer. So much work, so little revenue. Enough to pay some salaries and AWS bills, but it’s not that much. It’s just so much revenue to add in absolute terms.

SaaS 350

SaaS Headcount AWS Churn 350

SaaStr

FEBRUARY 21, 2024

AWS can’t support 20 partners equally. When partnering with big folks like Drata does with AWS, you have to bring business to them. Drata was one of three companies mentioned on stage by AWS’ Head of Partnerships because they did the most transactions on the marketplace than any other company. Otherwise, it falls apart.

AWS 279

AWS Scale Sales Hiring Marketing 279

SaaStr

AUGUST 15, 2020

Recently I was catching up with a good friend who used to be CEO of an enterprise-y SaaS social networking company — and the usage and engagement numbers of his business were just awful. It’s not like Zynga, where you see the latest XXXVille usage trail off in a few months after launch, and the revenue comes to a grinding halt.

AWS 337

AWS Churn Enterprise Pricing 337

SaaStr

MARCH 9, 2022

Focusing on smaller developers, in some ways it’s been a bit overshadowed by AWS, Azure, and Google Cloud. DigitialOcean doesn’t want to take AWS, Azure and Google on in the enterprise and doesn’t really try. They are only 15% of the customers, but 83% of the revenue. Only 38% of revenue in North America.

Azure 272

Azure AWS SMB Cloud 272

SaaStr

DECEMBER 27, 2023

Many have used Digital Ocean at the cheaper, simpler version of AWS-Azure-Digital Ocean to get going fast and quickly. But it’s raining cash, and earnings per share is growing 22% — faster than revenue. And if so, maybe that’s Digital Ocean. If you haven’t heard of Digital Ocean, ask your developer.

Scale 291

Scale AWS Azure Cloud 291

Clouded Judgement

FEBRUARY 7, 2025

They each have some of the largest cloud businesses in the world in AWS, Azure and Google Cloud respectively. Revenue multiples are a shorthand valuation framework. Multiples shown below are calculated by taking the Enterprise Value (market cap + debt - cash) / NTM revenue. Overall, there was weakness across the board.

Systems Review 144

Systems Review Cloud AI Artificial Intelligence 144

SaaStr

DECEMBER 14, 2023

At the time, they were less than a billion or two in revenue, and now, they just crossed over a $30B revenue run rate. Google Cloud Platform, on the other hand, is in a very different set that also competes with Microsoft, but AWS is considered their biggest competitor in the market.

Cloud 309

Cloud Scale AWS AI 309

SaaStr

DECEMBER 20, 2023

Canva: – Almost $2B ARR – Growing 40%+ – Profitable And … 4,000 employees That's about $500k in revenue per employee That's where software really makes money — Jason ✨Be Kind✨ Lemkin  ?? 4,000 Employees, So About $500,000 in Revenue Per Employee That’s very efficient.

AWS 307

AWS B2C Scaling AI 307

Tom Tunguz

MARCH 8, 2020

Your customers may not know that it’s your product under the hood, so while you may gain a bunch of revenue, your brand equity won’t appreciate. Marketplaces: AWS marketplace, Heroku marketplace, Salesforce marketplace. OEM relationships can be a good way to get to market quickly. But, there’s a tradeoff.

Scale 349

Scale AWS Consulting Sales Enablement 349

SaaStr

JANUARY 27, 2024

Typically support consumes about perhaps 5%-7% of your revenue at scale (excluding customer success) in most SaaS models. Another 5%-7% go to core infrastructure costs (AWS, Azure, Snowflake, etc). Dear SaaStr: What is The Average Ratio of Support Staff to Customer Count in SaaS?

Azure 273

Azure AWS SaaS Customer Success 273

Clouded Judgement

OCTOBER 11, 2024

As a result, software vendors often see an uptick in revenue and bookings during these periods. Top 10 EV / NTM Revenue Multiples Top 10 Weekly Share Price Movement Update on Multiples SaaS businesses are generally valued on a multiple of their revenue - in most cases the projected revenue for the next 12 months.

Cloud 167

Cloud Cost optimization & reporting GCP(Google Cloud Platform) Software Review 167

SaaStr

MAY 6, 2022

Ultimately — revenue multiples. Revenue multiples are how much VCs, investors, and ultimately, an IPO and public markets will value each dollar of revenue. Revenue multiples don’t affect customers, or even revenue itself. That revenue multiples should rise from where they were in 2019.

SaaS 348

SaaS Azure Cloud AWS 348

SaaStr

AUGUST 4, 2022

And inflation is awful. Exceeding expectations again, and importantly, also raising guidance in revenues for the full year. #3. . — Jason 2022 SaaStr Annual Sep 13-15 Lemkin (@jasonlk) August 3, 2022. So are we in a downturn in SaaS? Certainly, segments are. eCommerce, video, and more are having post-crazy growth hangovers.

Venture Capital 326

Venture Capital AWS Cloud Scale 326

SaaStr

AUGUST 8, 2023

In a fascinating workshop session, Miao shares his thoughts on how finance teams can contribute to company strategy and grow revenue. Strategic Finance optimizes a company’s underlying business model to create long-term value by increasing revenue and decreasing costs. SaaStr Workshop Wednesdays are LIVE every Wednesday.

Scale 239

Scale Finance Outsourcing Services Sales Recruiting 239

SaaStr

JULY 26, 2021

Even though you may not have that much revenue or that many leads, he will help you get more leads and maximize the experience of the leads you do have. But, sometimes a founder is >so< terrible at sales, so awful at it, that literally, it’s hopeless. Ideally, hire your Head of Demand Gen around now. But it’s super risky.

Sales Hiring 274

Sales Hiring Scale Startup AWS 274

SaaStr

JUNE 28, 2023

53% of Revenue is Outside U.S. With 1,500 employees, SEMRush is at about $190,000 in revenue per employee (1,500 employees). Spending a Hefty 50% of Revenue on Sales and Marketing. They spend a pretty high 50% of all revenue on sales and marketing — and that’s up from last year. And a few other interesting learnings: #6.

Scale 258

Scale AWS Scaling Revenue 258

SaaStr

MAY 12, 2019

GAAP revenue in Q1 ’19) because it’s in a space filled with strong competitors. We all know this from AWS and Twilio on down, but Fastly is a visceral reminder. It’s an almost 100% enterprise play — they have 227 customers spending over $100k a year, comprising 84% of their revenues. The lesson?

Outsourced Development 259

Outsourced Development AWS Retention Enterprise 259

Tom Tunguz

OCTOBER 22, 2022

They will manage their own servers to reduce the $3m annual AWS bill by 60%. Downtime implies a loss of revenue, which isn’t factored into the math above. Last week, David Heinemeier Hansson explained why his company, Basecamp, is leaving the cloud. Inspecting & controlling cloud costs may be the more appealing path.

Sales Hiring 266

Sales Hiring Cloud AWS Sales 266

Clouded Judgement

MARCH 22, 2024

Subscribe now ARR (Annual Recurring Revenue) vs ERR (Experimental Runrate Revenue) ARR (Annual Recurring Revenue) is one of the most popular SaaS (Non-GAAP) metrics. Many investors laugh (and some rightly so) at the fact that software companies’ valuations are often described as a multiple of revenue.

AI 190

AI Cloud Revenue Technical Advisors 190

SaaStr

SEPTEMBER 28, 2023

80% of the revenue is in the Enterprise. If you go back 10-15 years, when people ask about build vs. buy for the long-term, people would consider building their own data center if they were spending $100k/month on AWS. Today, companies spend over $10M/month on AWS — companies like Lyft, Pinterest, and Stripe. It’s not an option.

Enterprise readiness 283

Enterprise readiness Payment Solutions Enterprise Payments 283

SaaStr

NOVEMBER 15, 2023

64% of Large Customers Sourced From Partners They are AWS’s largest cybersecurity partner. This chart of their revenue growth will make your jaw drop: Not much to not like here. ? Most Enterprises Buy More Than 60 Endpoint Security Products So there is room for many winners here. #8. Only Founded in 2011.

Cybersecurity 293

Cybersecurity AWS Benchmarks Cloud 293

SaaStr

JULY 19, 2022

Using the Drift Conversation Cloud, businesses can personalize experiences that lead to more quality pipeline, revenue and lifelong customers. More than 5,000 customers use Drift to deliver a more enjoyable and more human buying experience that builds trust and accelerates revenue. Usually, it takes a paradigm shift to grow.

GCP(Google Cloud Platform) 261

GCP(Google Cloud Platform) Artificial Intelligence Enterprise readiness Azure 261

SaaStr

JANUARY 25, 2022

But a few thoughts on “the hardest part” for the first few stages: From $1-$100k in ARR, the hardest part is often how little revenue you get from each customer. So much work, so little revenue. Enough to pay some salaries and AWS bills, but it’s not that much. It’s just so much revenue to add in absolute terms.

Headcount 246

Headcount AWS SaaS Churn 246

SaaStr

NOVEMBER 3, 2022

Which means better customer relationships, more data, and new sources of revenue. Secureframe allows companies to get compliant within weeks, rather than months and monitors 100+ services, including AWS, GCP, and Azure. StratusGreen is a leading provider of cloud computing solutions and services for emerging and mid-sized businesses.

Payments 261

Payments Payment Services GCP(Google Cloud Platform) Payment Solutions 261

SaaStr

MAY 19, 2019

Here are a few: All the way until $600m+ ARR, the majority of Xero’s new bookings and revenue still came from Australia and New Zealand! Gross margins have grown to best-of-breed at 83%, after a migration to AWS and more automation in customer support. What lessons can we learn from this huge Kiwi SMB success, for other founders?

SMB 270

SMB Customer Lifetime Value AWS Churn 270

Tom Tunguz

OCTOBER 27, 2022

Infrastructure revenue growth averaged 33% this quarter, which is astounding considering we’re talking about businesses that sum to more than $50b of revenue per quarter. At a 7x multiple of revenue, that is another $84b of market cap creation, in theory. Let’s put these figures into context.

Cloud 227

Cloud GCP(Google Cloud Platform) Azure AWS 227

Chargify

AUGUST 17, 2020

However, with the introduction of Events-Based Billing by Chargify, this event-based billing model is now available to small and medium-sized businesses, giving them the ability to offer the same pricing models and bill customers just as precisely as Amazon Web Services (AWS) or the popular voice and messaging platform Twilio.

AWS 98

AWS Payment Services SaaS Payments Payments 98

SaaStr

MAY 15, 2024

Enterprise SaaS has a much higher average revenue per paying account, while consumer is around a $0.35 Churn is much higher on consumer subscriptions, but you have higher expansion revenue. If you’re in consumer, how can you go upmarket and get a small cohort of users paying more, churning less, and expanding revenue?

Subscription 301

Subscription Payment Features B2B Mobile 301