Cloud application services (SaaS) to reach $126 billions by the end of 2021

SaaS + Software
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The SaaS industry’s market capitalization in 2020 is approximately $110 Billion and is expecting a growth of 14.5% in the next year. And by the year 2022, it is expected to reach $143 billion. Services that are seeing most adoption by the companies include cloud consulting, implementation, migration, and management.


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The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

55% of SaaS companies rate Customer Retention as the key metric to measure

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

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Women in western countries use the internet 17 percent more than their male counterparts

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

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Negative Churn and Expansion Revenue

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

After $10M in ARR, the median growth rate slows to just under 50%

At Facebook, 15 percent of tech roles are staffed by women

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

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