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As expected, companies that are focused mainly on enterprise sales have higher levels of professional services. In comparison with last year’s survey, attach rates ticked down for Enterprise and SMB (2015: Enterprise 26%, SMB 18%).

For Entrepreneurs.com

More SaaS + Software Stats

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

Companies with longer contracts (2+ years) reported the lowest annual unit churn

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

More Growth Strategy Stats

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

26% of SAAS companies with at least $15MM in GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.

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

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

Negative Churn and Expansion Revenue

Software and online services are in a period of dizzying growth

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales