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A Look Back at Q4 '23 Public Cloud Software Earnings

Clouded Judgement

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.

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Clouded Judgement 3.22.24 - ERR vs ARR and the Conundrum of AI Revenue Streams Today

Clouded Judgement

And once a customer has paid back the initial acquisitions costs to acquire it, all future streams of revenue can loosely be described as a cash flow annuity. ” Let’s look at consumption revenue - this is also not technically recurring! It’s probably better described as re-occurring vs recurring.

AI 183
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Clouded Judgement 6.9.23 - Recap of Consumption Trends in Q1 '23

Clouded Judgement

Very healthy new business (new customer) acquisition. Most public companies don’t report net new ARR, so I’m taking an implied ARR metric (quarterly subscription revenue x 4). Companies that do not disclose subscription rev have been left out of the analysis and are listed as NA.

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Four Sales Compensation Tactics for Consumption-Based GTM with MongoDB’s SVP of Sales

SaaStr

Then, we moved to a more customer-friendly model with SaaS and subscription-based pricing. What’s evolved over the years and is driven by hyper-scalers like Google Azure, AWS, Twilio, and Stripe is the consumption-based model. The first might be market acquisition. Product: Needs to invest in tooling to support GTM teams.

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Using Product Led Growth as an Indicator for Investment w/OpenView Venture Partner, Ashley Smith (Video + Transcript)

SaaStr

I’m talking about product-led growth as an investment strategy, but really my background is 10 years of operating experience in the product-led growth world. Now I’m investing in that. I say investment strategy, but really it’s like how do you build a company that’s focused on product-led growth?

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SaaS, Subscription, and On-Premises Software – Don’t Confuse Subscription with SaaS

OPEXEngine

You hear the terms SaaS, subscription, term licenses and perpetual license software tossed around frequently. We sometimes hear companies call themselves “SaaS” companies, because they sell subscriptions, but they do not host software. The product is hosted by the vendor or a 3 rd party (like AWS).

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Rule of 40: How to benchmark your SaaS growth

OPEXEngine

Think of it this way: most SaaS companies have high customer acquisition costs, as you have to invest heavily in sales and marketing in order to realize high growth. This signals that the company is strong on both fronts (growth and margin), meaning that it might be an excellent investment opportunity.