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Google Cloud , Azure, and GitLab, all tied directly or indirectly to AI, are seeing massive acceleration. But Google Cloud, Azure, and GitLab are all benefiting and on fire. In the SMB space, the biggest problem is onboarding for complex products. Go more Enterprise or SMB. Crowdstrike is up and still grew 35%.
There are so many mixed signals: Unicorn product is up 2x over last year, but layoffs continue AI spend is fast and furious, with Google Cloud, Microsoft Azure, etc. 70% of Monday’s SMB customers are outside of tech. So is it a downturn in SaaS or Cloud — or not? seeing record acceleration in growth. Billion in ARR.
Focusing on smaller developers, in some ways it’s been a bit overshadowed by AWS, Azure, and Google Cloud. DigitalOcean is growing an impressive 37% at $500,000,000 in ARR, and staying very SMB with 600,000+ customers, but still driving deal sizes up a bit. Even if you’re far smaller than the Huge Guys.
If you’re selling software to SMB merchants and outside of tech like Shopify and Toast and Monday , things are pretty, pretty good, if in some ways still harder than before. Growth in public cloud services (AWS, Azure, Google Cloud, Snowflake, etc.) So things are all over the place these days. But it’s not that simple.
It’s worth pointing out that Azure is a bit above the long term trendline, while AWS is still below (but accelerating up). It’s worth pointing out that Azure is a bit above the long term trendline, while AWS is still below (but accelerating up).
Ok, it’s quite possible Gartner is way underestimating SMB spend here, the total spend on SaaS is likely $200B or more. In my 148 public SaaS companies (including most of the categories of this list but not AWS, Azure, GCP) the aggregate revenue is $185B. That’s $20B more budget than last year, just for enterprises alone.
Azure’s marketplace has over 4 million monthly visitors. So I think just opening your aperture when you’re thinking about marketplace, not assuming it’s just a small commercial SMB market sales. As a result of this, marketplaces have exploded in growth, and here’s some facts and figures.
But I'm not here to talk about hyper-scale, public clouds such as Amazon Web Services (AWS), Azure, or Google Cloud. I want to talk to you today about clouds. They're great, but for many, they're overkill.
It looks at the YoY dollar change in quarterly revenue from the hyperscalers (just looking at Azure / AWS because the data goes back further) going back a few years. If we break this down and look at Azure and AWS independently (graphs below), you’ll see how the AWS “swings” were a lot more volatile.
If you didn’t catch it the other day … and you can read about it on SaaStr …Microsoft and Google Cloud both had extremely strong quarters, Microsoft Azure grew 40% last quarter , and a record number of nine-figure and billion-dollar deals. Microsoft Azure’s at incredible scale and it still grew 40% last quarter.
Usage on Snowflake is driven by queries run on Snowflake Azure: Neutral Tone With Strength in AI Overall I’d characterize Azure’s quarter as a net positive. They guided to 26-27% growth in Azure in Q2 (with 1% coming from AI). Their consumption is driven by usage of applications built on top of Mongo.
For SaaS businesses that target smaller SMB customer segments, gross retention is typically in the mid to low 80’s with net expansion in the ~105% range. This is why the consumption players (Snowflake, Mongo, Confluent, Azure, AWS, etc) so more variability in the macro slowdown.
The exact playbook to move from SMB to enterpriseincluding partner enablement, segmentation, and incentive design. 85% of your customers being SMB and mid-market to at the end of that six years, it was 75%, uh, enterprise. Why retention isn’t just a CS metricand how to build a sales team that cares about it.
You can see the growth on the platform side with Azure, Google, and AWS and how much it’s accelerating in AI. They’re very SMB and just closed their first $750k TCV deal. If we’re adding 20%, where is the money going? To some extent, it’s not clear. Maybe endless price increases,” Jason says. A lot of it is moving to versions of AI.
On the Microsoft earnings call they said (related to Azure): “But at some point, workloads just can't be optimized much further. For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs. My interpretation is we’re in the bottoming phase.
I think Azure’s like 7,000, Google. Salesforce was a very rudimentary SMB app for a brief period of time, but it was. That’s not helping the lack of hiring, and everyone that’s big is hiring like there’s no tomorrow. I’m going to get the numbers wrong, I think Amazon has 10,000 open positions out in AWS.
Azure has been gaining on them rapidly and is growing a double that rate. Everyone knows Shopify for what it is today, but in the earlier days, it really was the best SaaS platform for SMB eCommerce providers. If you look at the IAS vendors, they passed $130 billion revenue milestone this year. It is staggering.
cloud infrastructure and you know, many thousands, hundreds of thousands of startups, you know, built on top of Azure. I think about every business that I’ve seen, and I still engage with a lot of startups and SMB, and small, medium companies as well. They didn’t have to reinvent the wheel. Focused on the use cases.
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