(c)iStock.com/alexsl

• 40% of SaaS companies are using Amazon Web Services (AWS) to deliver their apps today.
• Median subscription gross margins for SaaS companies in 2015 are 78%.
• Overall, SaaS companies are projecting median revenue growth of 46% in 2015.
• Channel sales and inside sales strategies delivered the highest revenue growth rates in 2014.
• Companies in the $5M – $7.5M range achieved 70% revenue growth in 2014, surpassing the median 36% growth rate last year.

These and many other insights are from the 2015 Pacific Crest SaaS Survey published by David Skok of Matrix Partners in collaboration with Pacific Crest Securities. You can download a free copy of Part I of the study here (PDF, opt-in, 72 pp).

305 SaaS companies were interviewed, 31% from international locations and 69% from North America.  David Skok and Pacific Crest Securities will publish Part 2 of the results in the near future. SaaS Metrics 2.0 – Detailed Definitions provides a useful reference for many of the SaaS metrics mentioned in the study.

This year’s survey attracted an eclectic base of respondents, with median revenues of $4M a year, with 133 companies reporting less than $5M, and 57 over $25M. Annual Contract Value (ACV) across all respondents is $21K, with 17% of respondents reporting ACVs over $100K.  Please see pages 3 & 4 of the study for a description of the methodology. Key takeaways from the study include the following:

• SaaS GAAP revenue growth is accelerating in 2014 and is projected to increase further in 2015 from 44% to 46%. Median revenue growth in 2014 for all survey respondents was 44%, with the aggregate projected growth for 2015 reaching 46%. When SaaS companies with less than $2.5M in revenues are excluded, median GAAP growth was 35% in 2014 and is expected to reach that same level in 2015.

• SaaS companies with mixed customer strategies are growing at 57% a year.  Excluding respondent companies with less than $2.5M in revenues, a mixed customer strategy dominates all others. Concentrating on enterprises and small & medium businesses (SMBs) both drove 33% revenue growth of respondent companies this year.

• 40% of SaaS companies are using Amazon Web Services (AWS) to deliver their apps today. AWS is projected to increase to 44% three years from now, with Microsoft Azure increasing from 3% today to 6% in 3 years.

• 41% of all SaaS companies surveyed rely primarily on field sales.  Factoring out the companies with less than $2.5M in revenue, field sales accounts for 32%.

• Field sales dominates as the most effective sales strategy when median deal sizes are $50K or more. In contrast, inside sales dominates $5K to $15K deal sizes, and the Internet dominates deal sizes less than $1K.  The following graphic provides insights into the primary mode of sales by median initial contract size.

• 16% of new Average Contract Value (ACV) sales is from upsells, with the largest companies being the most effective at this selling strategy. One of the strongest catalysts of a SaaS companies’ growth is the ability to upsell customers to a higher ACV, generating significantly greater gross margin in the process. SaaS companies with revenues between $40M to $75M increase their ACV by 32% using upsells. Larger SaaS companies with over $75M in sales generate 28% additional ACV with upsell strategies.

• The highest growth SaaS companies are relying on upsells to fuel higher ACV.  There is a significant difference between the highest and lowest growth SaaS companies when it comes to upsell expertise and execution.  The following graphic provides an overview by 2014 GAAP revenue category of percent of ACV attributable to upsells.

• 60% are driving revenues with “Try Before You Buy” strategies, with 30% generating the majority of their revenues using this approach.  On contrast, only 30% of companies generate revenues and ACV from freemium.

(c)iStock.com/abalcazer

It turns out unlimited does not mean unlimited after all: Microsoft has reneged on its plans to give Office 365 subscribers unlimited OneDrive cloud storage, capping each account at 1 TB.

This is perhaps being a little harsh, and isn’t a particularly egregious rewriting of the English language. Microsoft’s reason for cutting back on OneDrive and its unlimited access, available for just over a year, is that some people are just too greedy for their own good.

“Since we started to roll out unlimited cloud storage to Office 365 consumer subscribers, a small number of users backed up numerous PCs and stored entire movie collections and DVR recordings,” a OneDrive company blog post reads. “In some instances, this exceeded 75 TB per user, or 14,000 times the average.

“Instead of focusing on extreme backup scenarios, we want to remain focused on delivering high-value productivity and collaboration experiences that benefit the majority of OneDrive users,” it adds.

Suffice it to say the news has not gone down well on all sides, with many commenters , notably in the video production and photography industries, raging against the decision. It also makes an interesting comparison with a piece CloudTech published this time last year, criticising Bitcasa for binning its $10 unlimited cloud storage option and praising Microsoft for the opposite. At the time, Bitcasa blamed the shuttering on “abusers”, or in other words businesses using individual storage accounts. Now the tables have turned.

“OneDrive has always been designed to be more than basic file storage and backup,” the company post continues. “These changes are needed to ensure that we can continue to deliver a collaborative, connected, and intelligent service.”

The service is not going away immediately however; users will have a year to move their data over the 1 TB limit elsewhere, while consumers who ‘find that Office 365 no longer meets [their] needs’ will be given a pro-rated refund.

You can find out more here.

We all know that data growth is exploding and storage budgets are shrinking.
Instead of showing you charts on about how much data there is, in her session at 17th Cloud Expo, Barbara Murphy, Vice President of Marketing at HGST, will show you how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
See how HGST has used these solutions to gain more value out of the information we have – and capitalize on that value by delivering better products.

read more

The promise of IoT is to have all things connected, feeding data and pushing content and solutions. This connectivity and the data from it has the potential to provide richer customer experiences, better business results, and much more informed consumers. So what happens when we take what is personal and enhance it with technology?
Tile enables people to choose the things that matter most to them, and make those things connected. No other mass market IoT device does that at scale. In his session at @ThingsExpo, Guilherme Chapiewski, VP of Engineering at Tile, will speak about his vision for developing an IoT platform that will create opt-in communities and build networks intelligibly. Through his successful creation of Tile, Guilherme can illustrate key customer stories that demonstrate how building a strong community is essential to developing an IoT network for end users.

read more

Join IBM Bluemix on November 4 at 17th Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how to jump start your IoT strategy with MobileFirst, cloud and cognitive computing.
Transform everyday MobileFirst Cloud Apps into IoT solutions in 2.5 seconds! What happens when you combine a SmartPhone, a watch and a sassy robot with one MobileFirst Application? What happens when Watson does it – on Cloud!?! Join this session to see IOT in action! There are over nine billion Internet of Things devices in the world today, and the number is growing. Move your MobileFirst Appdev efforts from boring backlog to IOT-empowered experiences fast! Combine the application development efficiencies of Cloud with market leading Mobile development tools and microservices techniques with the cognitive services unlocked by Watson APIs. Build your apps using Node.red for quick development and integrations, Docker for running MobileFirst on IBM Bluemix and check out this demonstration of how you can deliver amazing functionality across a team of robots today, with just one little watch.

read more

DevOps is a software development method that places emphasis on communications between Software Engineering, Quality Assurance and IT Operations (SEQAITO ) with the goal to produce software and services to improve, increase the operational performance for the Enterprise.
Communications is key not only between the SEQAITO team members but also the communication between the applications and the SEQAITO team. How can an organization provide the human communication and the application communication to the SEQAITO team to ensure the successful development, deployment of the application?

read more