Clouded Judgement

AUGUST 9, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. While churn has picked up, for the most part companies still have net retentions >100% (although there are a lot more these days that don’t…). Subscribe now Share Clouded Judgement Leave a comment And neither do Zombies.

Cloud 205

Cloud Acquisition Scale Metrics 205

SaaStr

FEBRUARY 10, 2022

With each passing year, more and more of our online existence becomes tethered to the cloud. But how does the cloud take shape, and what can companies do to position themselves at the heart of its growing infrastructure? Infrastructure: Reloaded for the Cloud. Pro Tips for Modern Cloud Infrastructure.

Cloud 245

Cloud Venture Capital Social Media Technology 245

SaaStr

FEBRUARY 27, 2021

This trend has been true for a while, and now both its Service Cloud and its Platform group are bigger and faster growing than the classic CRM product we all know and use. It’s super interesting that today, Salesforce is more of a Service Cloud than a Sales Cloud. Churn Still a Bit Elevated Since Covid.

Deferred Revenue 306

Deferred Revenue Cloud Churn Scale 306

Tom Tunguz

JANUARY 25, 2021

When products and services fail, customers can’t buy online or use their software, they churn, and the company suffers brand damage. Many businesses are moving their infrastructure and software to the cloud to adopt Kubernetes and microservices. Those technologies offer terrific benefits in exchange for some complexity.

Software 357

Software Cloud Engineering Technology 357

SaaStr

JANUARY 2, 2021

Again, the latest crop of Cloud IPOs shows SMBs seem to have no limit in terms of TAM, with SMB growth at Shopify and Zendesk keeping up with enterprise, and even at Asana, SMB growth is still impressive at $250m ARR. We’ve seen this with almost all cloud leaders except Slack. Revenue growth far outpaced new customer growth.

SMB 363

SMB Enterprise Cloud Churn 363

Clouded Judgement

APRIL 11, 2024

Q4 earnings season for cloud businesses is now behind us. The first few months of this year felt like a lot of churning in the market. We then dipped below the trendline as we hit the period of “cloud optimizations,” and things have started to rebound. net retention and CAC payback). Is Software Rebounding?

Cloud 184

Cloud Software Azure AWS 184

SaaStr

MARCH 31, 2021

UiPath is one of the most amazing not-really-an-overnight success stories in Cloud, SaaS and software. It was founded way back in 2005 as an outsourcing company, then developed Windows software to automate scripts and more, and turned this into a powerhouse for automating complex functions integrating Cloud and on-prem. ” #5.

Outsourcing Services 362

Outsourcing Services Outsourced Development Payment Features Cloud 362

Clouded Judgement

APRIL 9, 2025

Q4 earnings season for cloud businesses is now behind us. As you can see from the data below most cloud businesses beat the consensus estimates for Q4. For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs.

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SaaStr

FEBRUARY 20, 2023

With 100+ public Cloud companies, it’s now a bit clearer that at least after a certain point in time, SaaS vendors have a lot of stability. Second, few SaaS companies past $20m in ARR with negative churn seem to fail. Some do fail, but they are generally ones with low NPS / high churn and other customer issues.

Innovation 339

Innovation Churn Cloud Branding 339

Tom Tunguz

MARCH 1, 2021

I thought it would be cloud-prem and customers driving SaaS products to use a single database. Here’s a schematic (click to enlarge) that describes how data flows with a cloud datawarehouse (CDW) fed SaaS app. A data scientist might develop a churn prediction algorithm. This may be the next shift.

Data 363

Data Artificial Intelligence Machine Learning SaaS 363

SaaStr

DECEMBER 27, 2023

So is it possible to be too efficient in SaaS and Cloud? Digital Ocean is only growing 16% now at $700m ARR, and churn is up and NRR down. Still Pushing ARPU Up, Churn Stable — But NRR Way, Way Down This Year Digital Ocean has small customers and tiny ARPUs, but pushing the ARPU up a bit has a huge impact on a percentage basis.

Scale 285

Scale AWS Azure Cloud 285

Sixteen Ventures

JULY 17, 2020

Is 5% a good monthly SaaS Churn Rate? Read on to learn the answer… As a consultant to SaaS and Cloud providers that are looking to grow, I get asked what an acceptable SaaS churn rate is all the time. ” In 2020 I just say, “let’s make churn a non-issue.” Monthly vs. Annual Churn Rates.

Churn 135

Churn SaaS B2C Pricing 135

SaaStr

AUGUST 5, 2020

You know your new growth rate, your new retention rate, your new churn rate. Cloud is on fire. First, maybe model a material uptick in churn going into next year. It can’t hurt to model a return to a higher churn phase next year. SaaS and Cloud can’t escape the mass bankruptcies coming. Build One Now.

Airlines 363

Airlines Government Entertainment Travel 363

SaaStr

MARCH 13, 2021

running across multiple clouds. The size and power of the Cloud is just awesome these days. Breathtaking acceleration of MongoDB downloads — a good proxy for acceleration in the Cloud overall. Multi-cloud is one of their top accelerants. Multi-cloud is one of their top accelerants. Mongo shows very.

Scale 334

Scale Outsourced Development Cloud Scaling 334

SaaStr

DECEMBER 27, 2020

New Relic is one of my favorite Cloud stories. Times have changed, the Cloud has gotten a lot bigger, and there are many more vendors, including the red-hot DataDog, to grab mindshare. Do whatever you can to drive up NRR / net negative churn. Today New Relic is worth more than 10x that, at $4.3B. An incredible streak.

Scale 339

Scale Outsourced Development SMB Cloud 339

Clouded Judgement

DECEMBER 21, 2023

Q3 earnings season for cloud businesses is now behind us. Commentary from the cloud providers seems to be that the major macro headwinds around optimizations and new deal scrutiny have started to abate. ” 3 months later, what happened to those green shoots? So we’d expect the YoY growth rate to pick up in Q3 ‘23.

Cloud 184

Cloud Software Benchmarks Retention 184

SaaStr

SEPTEMBER 26, 2019

What we learned from ’08-’09 in SaaS: First, SMB churn went through the roof — as SMBs went under much more quickly and often. Anyone processing a lot of SMB and credit-card deals saw churn probably double. Assume SMB churn doubles — and quickly. Cloud is a tidal wave. Which was brutal.

SaaS Payments 280

SaaS Payments Sales Hiring Scale SMB 280

Clouded Judgement

OCTOBER 3, 2024

Q2 earnings season for cloud businesses is now behind us. As you can see from the data below most cloud businesses beat the consensus estimates for Q2. For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs.

Cloud 167

Cloud Software Benchmarks Retention 167

Clouded Judgement

MARCH 22, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. On top of that, churn and expansion tend to be quite predictable with low volatility. Subscribe now Share Clouded Judgement Leave a comment Follow along to stay up to date!

AI 190

AI Cloud Revenue Technical Advisors 190

Clouded Judgement

SEPTEMBER 12, 2023

Q2 earnings season for cloud businesses is now behind us. Extra pressures around optimizations still exist, however gross churn levels have stabilized, and commentary on earnings calls suggest conversations around new bookings are starting to pick up. We will see this show up in revenue figures in a quarter or two.

Cloud 176

Cloud Software Benchmarks Retention 176

SaaStr

DECEMBER 14, 2020

If your net churn is negative, you have a superpower. Yes, these are the Best of Times in Cloud. With the Cloud being bigger than ever, the leaders in SaaS are growing faster than ever. If you fall out of hyper-growth mode, still go long. That will bail you out. Even if there is a stretch you are unfundable.

SaaS 351

SaaS Acquisition Cloud Finance 351

Clouded Judgement

APRIL 12, 2023

Q4 earnings season for cloud businesses is now behind us. As you can see from the data below most cloud businesses beat the consensus estimates for Q4. This quarter more than half of cloud software businesses missed next quarters consensus. They do this to set themselves up to consistently beat estimates, demonstrating momentum.

Cloud 167

Cloud Software Benchmarks Retention 167

SaaStr

OCTOBER 29, 2020

Ok so what are the top 5 learnings here for SaaS and Cloud founders? Zendesk’s churn is still a bit higher than pre-Covid, but is almost back to pre-Covid levels. So if you sell to SMBs, or a mix of SMBs and enterprise like Zendesk does (with 160,000 total customers), well … enough with the excuses on churn.

SMB 297

SMB Enterprise Churn Retention 297

SaaStr

JANUARY 20, 2022

You get a complete overview of your global subscriber base; MRR, ARPU, ASP, churn and LTV are presented in a beautiful and easy to use dashboard. Our mission is to build powerful and secure cloud software for subscription businesses of all sizes, with a strong emphasis on good design and ease of use.

DevOps as a Service 246

DevOps as a Service AI Search Cloud compliance 246

SaaStr

MAY 22, 2024

OK Gartner is NOT a SaaS or Cloud company. About 104% Effective NRR Gartner sees about -18% gross revenue churn, but price increases add +3% back, and additional research and purchases add +19%. But — it’s one that is very important to many of us that sell into the enterprise. Gartner’s research does. #4.

Revenue 285

Revenue Enterprise Cloud Pricing 285

SaaStr

DECEMBER 14, 2021

When it launched in 2011, Treasure Data’s positioning was a Hadoop-based big data warehouse in the cloud. Commoditization From AWS & Google Cloud. As a result, the logo churn went up, the NRR stopped increasing, and the deal rate decreased as the sales cycle got longer. The Platform: $0 – $5 Million ARR.

Sales Hiring 300

Sales Hiring Data AWS Leadership 300

Clouded Judgement

JULY 16, 2024

There’s a lot of info to digest, so in the sections below I’ll try and pull out the relevant financial information and benchmark it against current cloud businesses. Our cloud-based platform enables a modern and expanded approach to finance and EPM, which is sometimes also referred to as corporate performance management, or CPM.

Benchmarks 295

Benchmarks Data Artificial Intelligence Machine Learning 295

SaaStr

APRIL 10, 2023

And the key difference market researchers say between Behavioral and Attitudinal loyalty isn’t what you’d expect – the churn rate. The logo churn rate is often similar in the short-term. We buy more modules, e.g. for Salesforce, the Service Cloud, and now, the Marketing Cloud. We take site licenses.

Airlines 286

Airlines Cloud Market Research Customer Success 286

SaaStr

NOVEMBER 3, 2022

You get a complete overview of your global subscriber base; MRR, ARPU, ASP, churn and LTV are presented in a beautiful and easy to use dashboard. Our mission is to build powerful and secure cloud software for subscription businesses of all sizes, with a strong emphasis on good design and ease of use.

Payments 258

Payments Payment Services GCP(Google Cloud Platform) Payment Solutions 258

SaaStr

JULY 15, 2022

Almost every Cloud leader is growing like a weed. Churn went way up, for sure. And there’s still always at least a small but engaged group of customers looking for a better solution. From Datadog to Snowflake to Zendesk to Box to Twilio. Some are much more impacted post-Covid, like Shopify and Zoom.

Marketing 357

Marketing Startup Cloud Churn 357

SaaStr

JANUARY 2, 2020

So … if you just keep doing what you doing well, keep the net churn negative, then wherever you are today, should grow 2 x 5 x 3. It’s why all the Cloud leaders today are marching to $1B+ in ARR or have blown past it, from Zendesk to Twilio to Hubspot and more. That’s 30x. 10m ARR today x 30 = $300m ARR.

Retention 319

Retention Cloud Churn Revenue 319

SaaStr

MARCH 1, 2022

Atlassian has gone almost 100% Cloud since then, and has held up nicely in the overall public markets even as others have taken bigger hits. Cloud product pricing went up 5% a year last year, and legacy server products went up much more. Transition to Cloud takes time at scale. 5%+ pricing increases help fuel growth.

Scale 261

Scale Marketplace as a Service Headcount Cloud 261

Clouded Judgement

DECEMBER 23, 2022

Every week I’ll provide updates on the latest trends in cloud software companies. Here are the four data points: Net New ARR: Net new ARR added in a quarter represents new customer ARR + expansion ARR - churn / contraction ARR. Subscribe now Share Clouded Judgement Leave a comment Follow along to stay up to date!

Cloud 130

Cloud Sales Hiring Trends Payment Features 130

Clouded Judgement

JUNE 20, 2023

Q1 earnings season for cloud businesses is now behind us. As you can see from the data below most cloud businesses beat the consensus estimates for Q1. For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs.

Cloud 167

Cloud Software Benchmarks Scale 167

SaaStr

JUNE 5, 2020

With the Salesforce IPO in 2004, we saw the first sign that institutional investors were comfortable with a standard set of SaaS metrics: Churn, sales efficiency , ARPU, LTV, customer acquisition cost , and so on. . The SKYY First Trust Cloud Computing ETF has grown to $3.3 Churn under 10% annually? Why Let Banks In?

Venture Capital 293

Venture Capital Technical Review SaaS Scale 293

SaaStr

MARCH 22, 2023

So few Cloud software companies have had a more interesting history than UiPath. While UiPath hasn’t yet hit the 20%+ that Wall Street wants for Cloud companies at scale, importantly, it’s on the way. It took them a full 10 years to get to $1m in ARR (!). And then after that, explosion. Targeting 9.5% They were 6% the prior year. #5.

Scale 278

Scale Cloud Scaling Churn 278

SaaStr

DECEMBER 3, 2024

Why Peter Gassner Built The Most Important SaaS Company You’ve Never Heard Of — And Turned It Into a $30B+ Vertical SaaS Cloud Giant Before founding Veeva, Gassner’s experience was marked by significant positions at major software companies. Instead of building generic enterprise software, he went all-in on life sciences.

SaaS 258

SaaS Leadership Cloud Enterprise 258