Clouded Judgement

AUGUST 4, 2023

” These are two quotes about AWS on the Amazon earnings call. AWS grew 16% in Q1, but called out growth in April (first month of Q2) was 11%. Given most software companies are not profitable, or not generating meaningful FCF, it’s the only metric to compare the entire industry against.

Cloud 130

Cloud Azure Cost optimization & reporting AWS 130

Clouded Judgement

FEBRUARY 16, 2024

” From AWS (paraphrased): They said they expect the reaccleration they saw in Q4 to continue into 2024 2024 Estimate Updates One important metric I’m tracking this quarter is the change in 2024 estimates pre / post earnings. I created this subset to show companies where FCF is a relevant valuation metric.

Cloud 161

Cloud AWS Metrics Subscription 161

Clouded Judgement

OCTOBER 28, 2022

Hyperscalers Report Quarterly Earnings This week we saw AWS (Amazon), GCP (Google) and Azure (Microsoft) report earnings. Overall, it wasn’t pretty… AWS grew 28% when expectations were 30-31%. Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date!

Cloud 130

Cloud Azure AWS Cost optimization & reporting 130

OpenView Labs

FEBRUARY 9, 2021

This is why we’re seeing more and more SaaS companies—Datadog, Twilio, AWS, Snowflake, and Stripe, to name a few—find success with product led growth paired with usage-based pricing. Usage-based pricing will be the key to successful monetization in the future.”. Usage-based pricing is in all layers of the tech stack.

Scale 98

Scale Pricing Scaling AWS 98

Clouded Judgement

MARCH 22, 2024

Subscribe now ARR (Annual Recurring Revenue) vs ERR (Experimental Runrate Revenue) ARR (Annual Recurring Revenue) is one of the most popular SaaS (Non-GAAP) metrics. However, it’s also one of the most loosely used metrics, and is frequently misused. I created this subset to show companies where FCF is a relevant valuation metric.

AI 183

AI Revenue Cloud Technical Advisors 183

Clouded Judgement

JANUARY 6, 2023

Cloud Downgrades This week UBS came out with a couple research reports citing concerns in AWS / Azure growth. This brings me back to AWS / Azure downgrades. This was the worst tone that we’ve heard in years from large AWS/Azure partners, a group that usually expresses different shades of optimism about AWS/Azure growth.”

Cloud 130

Cloud Azure AWS Underperforming Technical Team 130

Clouded Judgement

APRIL 28, 2023

AWS (Amazon), Azure (Microsoft), and Google Cloud (Google) all reported this week. Then AWS appeared to add fuel to that hope before giving us a huge rug pull. After all, they had a lot of AI tailwinds, and benefited tremendously from consolidation (without a headwind of a larger base of smaller startups, like AWS).

Cloud 130

Cloud Azure AWS AI Search 130

Clouded Judgement

SEPTEMBER 8, 2023

” We saw some green shoots in AWS and a few other consumption names, and overall sentiment seemed more positive. I’ve put together a number of charts below to show how metrics from this quarter compared to prior quarters. I created this subset to show companies where FCF is a relevant valuation metric.

Cloud 169

Cloud Software Review AWS Trends 169

Clouded Judgement

APRIL 21, 2023

Next week we get all 3 hyperscalers reporting (AWS from Amazon, Azure from Microsoft, and GCP from Google). On AWS, in their Q4 earnings call they said AWS was growing “mid teens” in January (down from 20% in Q4). Every week I’ll provide updates on the latest trends in cloud software companies.

Cloud 130

Cloud Azure AWS GCP(Google Cloud Platform) 130

Clouded Judgement

JULY 28, 2023

AI = Data + Compute I’ll continue beating this drum, but we got two great quotes from Azure and AWS this week. ” Then at AWS Summit they called out “Your data is your differentiator when it comes to Generative AI.” AWS reports next week. ” Data is more important than ever! So what did we learn?

Cloud 130

Cloud Azure AWS GCP(Google Cloud Platform) 130

Clouded Judgement

NOVEMBER 10, 2023

Hyperscalers (AWS, Azure, GCP as companies look for cloud GPUs who aren’t building out their own data centers) Infra (Data layer, orchestration, monitoring, ops, etc) Durable Applications We’ve clearly well underway of the first 3 layers monetizing. I created this subset to show companies where FCF is a relevant valuation metric.

Cloud 183

Cloud Artificial Intelligence AI GCP(Google Cloud Platform) 183

Clouded Judgement

SEPTEMBER 15, 2023

AWS growth seems to be re-accelerating, and qualitative feedback from a number of companies in Q2 (especially those with July quarter ends) suggested new customer bookings conversations were picking up. For the bottom 10 companies on the right hand side of the chart, the median change in stock price after earnings was (18%).

Software Review 130

Software Review Cloud Software AWS 130

SaaStr

AUGUST 7, 2021

I thought it might be helpful to assemble a checklist of 22 reasons I almost immediately pass on investing in start-ups that are still interesting. “Quarterly MRR”, 100% Gross Margins, and Other Crazy Metrics. But if your metrics make truly zero sense, to me, that’s a flag. Telling Me the Price is Going Up.

Sales Recruiting 336

Sales Recruiting Scale AWS Investment 336

CloudGeometry

MARCH 3, 2022

Feature value: a function of time investment of users and customers The set of problems that your SaaS solves won’t survive long in the digital age if all it does is cut prices. Think beyond the cloud about what other resources you need to invest in making customers successful with your platform.

Well Architected Framework 130

Well Architected Framework VPCs (Virtual Private Cloud) SaaS Cloud 130

Clouded Judgement

JUNE 9, 2023

They did call out sequential growth in Confluent Cloud every quarter this year which was a big positive Still seeing elongated deal cycles and less expansion revenue The Bad AWS: Headwinds Getting Worse Their quarter ended in March, but on the earnings call they called out weakening growth in April.

Trends 130

Trends Cloud Azure AWS 130

SaaStr

NOVEMBER 14, 2023

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. Rather than compensating based on ARR, it’s based on a volume and quality-based metric.

Compensation 164

Compensation Sales Azure AWS 164

SaaStr

MARCH 31, 2022

And it’s one of the three large cloud vendors that we all know: Microsoft, AWS, and Google. AWS’s marketplace has seen 1.5 But also it’s allowed us to get much closer to our provider, I mean, we host and run 100% on AWS, but pull data from everywhere. It was pretty easy to drive that from our side.

Scale 205

Scale Marketplace as a Service Cloud SaaS Payments 205

Clouded Judgement

MARCH 31, 2023

The majority of COGS (revenue less COGS = gross profit) fall in hosting costs (ie AWS), and some customer support. The only way for software companies to avoid this gross margin compression when incorporating AI features is to raise prices. Double the price! Consumption Pricing.

Cloud 130

Cloud Sales Hiring AI Headcount 130

OPEXEngine

JANUARY 11, 2022

Consumption-based pricing is best used when you can accurately and easily break down your service offering into small, digestible units. Many companies in the technology industry are moving toward “pay for what you use” consumption-based pricing models. Four pricing models. Uncommitted contracts. Challenges and shifts.

Pricing 52

Pricing Payment Solutions Outsourced Development Compensation 52

Clouded Judgement

FEBRUARY 3, 2023

There’s a real chance the fed funds rate isn’t going >5%, and a soft landing or delayed recession is certainly possible (maybe even being priced in). If the market thinks the setup for H2 is great, it won’t wait until H2 to “price it in.” But what’s happened since? Lots of deceleration in growth.

Cloud 130

Cloud Azure AWS Generative AI 130

Stax

APRIL 18, 2024

How companies price and distribute their solutions affects everything from revenue streams and customer interaction to product development and delivery methods. Microsoft Azure, Amazon Web Services (AWS), or Salesforce AppExchange). SaaS licensing, on the other hand, follows a subscription-based pricing model.

Outsourcing Services 88

Outsourcing Services SaaS Payments Payment Services Payment Methods 88

OpenView Labs

MARCH 16, 2021

The usage-based pricing model almost feels like a cheat code —it enables SaaS companies to more efficiently acquire new customers, grow with those customers as they’re successful, and keep those customers on the platform. But the shift from pure subscription to usage-based pricing is nearly as complex as going from on-premise to SaaS.

Pricing 52

Pricing Payments SaaS Payments Payment Solutions 52

Clouded Judgement

AUGUST 11, 2023

The hyperscalers (AWS, Azure, GCP) are seeing some uptick, but this is largely from selling compute (ie cloud GPUs). Given most software companies are not profitable, or not generating meaningful FCF, it’s the only metric to compare the entire industry against. However, it’s not showing up in the data yet.

Cloud 130

Cloud Trends Azure GCP(Google Cloud Platform) 130

SaaStr

SEPTEMBER 12, 2019

Ashley Smith, Venture Partner at OpenView provides insight on what investors are looking for in product metrics and growth indicators so you can capitalize on your product’s story for funding. Now I’m investing in that. I enjoyed that weird dynamic of trying to impress them and get them to invest in my company.

Investment 100

Investment Underperforming Technical Team Sales Hiring Software Review 100

SaaStr

APRIL 30, 2022

Check out this 2018 Europa session with Guillaume Princen, Head of France and Southern Europe @ Stripe, where he talks about the metrics you need to be focused on in your startup. If you don’t have the time to watch the whole session, here are the main metrics you should be mindful of. MRR, obviously. We talked about churn.

SaaS Payments 238

SaaS Payments Metrics Payment Methods Scale 238

SaaStr

OCTOBER 31, 2019

What I’m going to do is talk a little bit about what we’ve seen over the course of the last year and then also talk about some metrics we track or we encourage our founders to track as they’re building their businesses, and then, lastly, try to go through a few predictions for the next couple of years.

Cloud 100

Cloud Scale AWS Machine Learning 100

Frontegg

MAY 27, 2021

Making the bottom-up shift: You are shifting from the top-down to a bottom-up mindset, which means more money and time to invest in R&D efforts. This metric is a strong future revenue indicator. Founded : 2011 Known customers: Facebook, IBM, Microsoft, AWS, Unity, Udemy, Shopify Price starts at: $38/month per user. #2

Payment Solutions 98

Payment Solutions SaaS Payments Payments Scale 98

ProfitWell

SEPTEMBER 10, 2020

By almost all key metrics, now is a great time to get into the SaaS business model. Running your own server to handle your customer's valuable data requires a huge investment to match the same level of security and reliability that comes baked into services like Amazon AWS and Microsoft Azure cloud. Pricing Changes.

SaaS Payments 66

SaaS Payments Trends Merchant Services Payments 66

Chart Mogul

JUNE 23, 2022

This is a perfect time to invest in your user base & core product offering because playing to your strengths will pay off. You might be hard-pressed by your AWS bill but you’re not going to start replacing the engine to lighten the load mid-flight. Here are a few thoughts: 1. Dig Deep Into Your Financials. Further Reading.

SaaS 52

SaaS DevOps as a Service Marketplace as a Service Forecasting 52

OPEXEngine

JUNE 11, 2020

The product is hosted by the vendor or a 3 rd party (like AWS). However, many SaaS companies charge for a “premium” version, which in effect, is charging extra for additional services but those services are part of the product pricing.

SaaS Payments 52

SaaS Payments Payment Solutions Subscription Payment Features 52

OpenView Labs

FEBRUARY 11, 2021

And yet it’s often tucked away in a financial update while a medley of product metrics enjoy the spotlight. It needs to be treated as a top-level operational metric that a founder must know and understand. As a founder, you can use this 84 cents to pay salaries, office rent, dividends, or invest in R&D.

Scale 52

Scale Payment Methods Payment Services Systems Review 52

SaaStr

DECEMBER 20, 2019

Why does Manny believe it is so important to track pipeline coverage as one of your core metrics? Ashley Smith, Venture Partner at OpenView will provide insight on what investors are looking for in product metrics and growth indicators so you can capitalize on your product’s story for funding. You can increase prices.

Scale 142

Scale Sales Hiring Construction Education 142

SaaStr

MARCH 22, 2023

Ed Lenta, the SVP and GM of Databricks, had the rare opportunity of scaling three hypergrowth companies — VMware, AWS, and Databricks. At VMware, they priced based on physical CPUs customers chose — a hugely transactional service that constrained growth. Invest in and put that into the market to start softening the beach.

Scale 203

Scale Scaling AWS Sales Hiring 203

SaaStr

JANUARY 28, 2020

Maria : Yeah, I think, coming from a marketing side and thinking about that as a marketer, marketing is all about investments. There’s none of the brands that you’ve seen get to an IPO or continue on to a Fortune 500 company that is not making some significant investments there. Aaron : And they just have to do it.

Sales Hiring 205

Sales Hiring Scale Underperforming Technical Team Sales Recruiting 205

SaaStr

DECEMBER 14, 2021

The Treasure Data platform instantly analyzed large amounts of data, which meant that companies didn’t need to hire lots of computer scientists or put up a considerable upfront investment for data projects. . Commoditization From AWS & Google Cloud. million and $1.2 million deals led by the founders.

Sales Hiring 272

Sales Hiring Data AWS Leadership 272

OpenView Labs

FEBRUARY 3, 2022

This metric represents how long it takes, in months, to pay off the costs of acquiring a given customer on a gross margin basis. Usage-based pricing (UBP) , also known as consumption-based pricing, allows customers to pay for products according to how much they use. These metrics are an indicator of product-market fit.

Headcount 73

Headcount SaaS Compensation Acquisition 73

SaaStr

JUNE 1, 2021

One of the challenges with that, one of the requisites, in order to start charging money, is you have to come up with a price. At the time we had to make the pricing decision, we didn’t have the six MBAs yet. ” “Yep, we need a price.” Number one, can we sell this thing at any price? We did that.

Part-Time VPE 226

Part-Time VPE Technical Cofounder CTO Hire New CTO 226