So 2023 wasn’t a rough year for everyone. Shopify, Canva, Monday and tons of other SaaS leaders especially those less focused on tech and startup customers had big years. And broader Cloud players had a great year too, from MongoDB to Cloudflare to Azure, if not quite as crazy as at the peak of 2021.
But overall, overall … well SaaS and Cloud revenue growth hit record lows per the BVP Cloud Index:
As you can see, even though 2022 was a tough year in the public markets and for valuations, revenue growth still held up reasonably well. But then in 2023 — it just plummeted. Further and further as the year went on.
Now, plenty of SaaS leaders saw Q2’23 in particular as their low point, and saw growth reaccelerate at least a smidge from there. So there is plenty of reason for at least modest optimism for 2024.:
And Gartner still predicts overall Cloud spend will grow to record rates in 2024.
But the trend of slowing growth in 2023 wasn’t just a thing, it wasn’t just a blip like the 2016 crash was. It was an All Time Low. We’ve always bounced off the lows in SaaS, again and again, over the years. But at some point, perhaps, Cloud spend will be so saturated, it just has to slow. I’m betting that’s not 2024-2026.
Still, the trend line does make you worry a smidge. We’ll spend $1 Trillion on enterprise SaaS next year per Gartner. Can it really get to $10 Trillion? The entire U.S. economy is only $27 Trillion. At some point, spend will mature. Hopefully, that point wasn’t 2023.
