SAN FRANCISCO, Oct. 21, 2015 /PRNewswire/ -- Pacific Crest Securities, the technology specialists of KeyBanc Capital Markets, today released the results of its 2015 Pacific Crest Private SaaS Company Survey, which shows a significant, single-year increase in the number of private Software-as-a-Service (SaaS) companies using public cloud solutions to deliver their applications to customers.
Nearly two-thirds (63 percent) of the SaaS companies surveyed this year say they rely primarily on public cloud solutions to serve up their applications, up from 48 percent in 2014. Amazon Web Services is by far the most widely used cloud solution, representing more than twice the market share of every other cloud service combined.
The annual SaaS Survey is used to identify the operational and financial trends that benchmark success among SaaS companies. Findings cut across virtually every aspect of SaaS operations, from go-to-market selling strategies and customer retention rates, to operational management and margin structures. More than 300 senior executives from SaaS companies around the world participated this year. Survey results are available at http://www.pacific-crest.com/2015-saas-survey.
Survey results also show that the industry has seen steady growth during the last two years and continued growth is anticipated in 2015. The median revenue growth in 2014 among respondents was 44 percent, up from 37 percent in 2013. Survey respondents also project a 46 percent median revenue growth in 2015.
Another set of key findings reveal that the best performing SaaS companies are making greater use of so-called "land and expand" selling strategies, in which they focus on growing revenue by up-selling existing customers over multiple years.
Specifically, the survey finds that:
- Companies showing the most success with "land-and-expand" strategies are growing much faster than their peers.
- The cost of adding new revenue from existing customers is a small fraction (24 percent) of the cost to add revenue from new customers.
"A lot has been written about the transformation of enterprise software to SaaS," said David Spitz, Managing Director, Software & Security at Pacific Crest Securities, and primary author of the survey. "While this transition has provided a number of benefits to SaaS companies and their customers, it has also forced people to completely reinvent how they manage their businesses. With our annual SaaS Survey, we are providing invaluable tools to help teams better understand what successful software companies look like and the underlying trends that are driving performance in today's markets."
Added David Skok, VC at Matrix Partners, author of the SaaS-focused blog forentrepreneurs.com, and active supporter of the survey for the past four years: "We work with hundreds of SaaS companies who rely on this survey for critical insights. Because of the upfront sales and marketing costs and the delayed revenue collection inherent to most SaaS models, there can be a deep cash flow trough in these companies' early years. Consequently, it's imperative that the industry be able to benchmark their core metrics to know if they're on track."
About the Pacific Crest Private SaaS Company Survey
The Pacific Crest Private SaaS Company Survey is one of the leading reference materials on financial and operating benchmarks for the SaaS sector. The annual survey was first developed in 2011 to provide benchmark performance metrics for SaaS companies and steer decisions for success among SaaS companies and their investors. A total of 305 senior executives from SaaS companies around the world participated anonymously and confidentially in the 2015 survey. Responses were submitted online between June and July 2015. Pacific Crest cannot verify accuracy of responses. Observations and commentary contained herein relate solely to the survey results and cannot necessarily be applied elsewhere.
About KeyBanc Capital Markets
KeyBanc Capital Markets provides deep industry expertise and capital markets and advisory solutions to companies in targeted verticals which include Consumer & Retail, Healthcare, Industrial, Oil & Gas, Real Estate, Utilities, Power & Renewables, Diversified Industries, and Technology, through Pacific Crest Securities. With nearly 750 professionals across a national platform, the firm has more than $25 billion of capital committed to clients. Our award winning Equity Research team provides coverage on more than 775 companies. KeyBanc Capital Markets and Pacific Crest Securities are trade names under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association ("KeyBank N.A.") are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services, are offered by KeyBank N.A.
About Pacific Crest Securities
Pacific Crest Securities provides premier investment banking services for technology, operating at the leading edge, where global connectivity is fueling an unprecedented expansion cycle. We apply our knowledge of the drivers of value creation and global network of relationships to technology — high-growth sectors, such as Cloud and big data, SaaS, global internet, mobility, next-gen infrastructure and communications, and industrial and energy technology. As a result, our clients — technology's foremost institutional investors and market leading companies — rely on us to achieve superior returns and gain competitive advantage from the seismic shifts occurring in technology. Our sector bankers and transactional specialists collaborate to help clients identify and implement the right course of action, whether a financing, M&A or alternative event. Our clients include Alibaba Group, Arista Networks, Enviance, GTT Communications, Manhattan Software, SevOne, Shopify, Vonage and WebPT, among others.
KeyCorp was organized more than 160 years ago and is headquartered in Cleveland, Ohio. One of the nation's largest bank-based financial services companies, Key has assets of approximately $95.4 billion, as of Oct. 15, 2015. Key provides deposit, lending, cash management and investment services to individuals, small and medium-sized businesses under the name of KeyBank National Association. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.
SOURCE Pacific Crest Securities