Quote Info

In 2019, spending on enterprise software is expected to reach 427 billion U.S. dollars. That same year, expenditure in the global information technology market is forecast at 3,790 billion U.S. dollars, while IT services, the second largest segment behind communications services, is set to reach 1,016 billion U.S. dollars. Enterprise software is a segment of the information technology market aimed at responding to the needs of larger organizations’ core business processes. Generally, enterprise software aims to improve productivity and efficiency, fulfilling the needs of one or more core business processes via a single piece of software architecture. Human resources, accounting, and sales are functions commonly targeted by such programs. The Enterprise application software market encompasses among other things, business intelligence, enterprise resource planning, customer relationship management, supply chain management, and project and portfolio management.


More SaaS + Software Stats

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

Internet Sales strategies have a significantly lower CAC of just $0.42

The median annual unit churn for SAAS companies was 10% in 2016

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

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%”

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey