The global cloud computing market size is expected to grow from USD 371.4 billion in 2020 to USD 832.1 billion by 2025

From MarketsandMarkets
Quote in SaaS & Tech Growth Strategy

Many of the enterprises across verticals have adopted the work from home model to safeguard employee well-being and maintain operational efficiency, surging the demand for Software-as-a-Service (SaaS)-based collaboration solutions. For instance, Microsoft Team platform users increased to 44 million globally due to the high demand for collaboration solutions. While the standalone 8×8 Video Meetings cloud solution experienced a more than 300% increase in registered users in the last week of February across ~150 countries. Other popular SaaS-based collaboration tools gaining traction are Google Hangouts, Cisco Webex, Slack, Zoom, Ding Talk, WeChat Work, and Tencent Meeting, among others.

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

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

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

Negative Churn and Expansion Revenue

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

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

SaaS organizations are now operating in over 100 countries

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

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

More SaaS & Tech Growth Strategy Stats

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

56% treat “Existing Customer Renewals” as high priority

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

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

Customer Segmentation analysis will help point out which are your most profitable segments

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

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

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide