What's 🔥 in Enterprise IT/VC #226
😲 $1 Trillion of ☁️ spend up for grabs in next 10 years, Enterprise Tech 30 + power of PLG + OSS
Ed Sim | Feb 27 |
What's 🔥 in Enterprise IT/VC #226😲 $1 Trillion of ☁️ spend up for grabs in next 10 years, Enterprise Tech 30 + power of PLG + OSS
While tech stocks were battered this week from the threat of rising interest rates, I keep reminding myself that we are still in the early innings of the ☁️ . Along those lines, McKinsey came out with a bullish report on ☁️ spend citing $1 trillion across Fortune 500 companies will be up for grabs over the next 10 years. And in the next 5 years alone, Google believes the ☁️ market will grow by another $500 billion (see SaaStr post). So if we extrapolate that number out, we get over $1 trillion of spend again over the next 7-9 years. Bottom line, regardless of how stocks behave due to interest rates, there is a shit ton of revenue up for grabs. Even ☁️ companies that are focused on SMBs can find a way to navigate and grow vs. AWS, Azure and GCP. Digital Ocean just filed its S-1 and is a developer and community first cloud provider for SMBs. It’s a great read to see how DO competes with a focus on simplicity, support, community and open source software. In 9 years, the company has built a customer list of 570k with a developer first learning community of over 34k dev tutorials and technical guides, and hit over $357 million in ARR. One key area to watch though is net retention rate which is well below the best in class enterprise cos like datadog at 130%+. While net retention may limit upside here, what I love most is the scrappy playbook that DO created with a focus on content marketing and user tutorials which serves as an engine for growth. There is much that developer first founders can learn from their content and SEO strategies. Shifting gears, the 3rd Annual Enterprise Tech 30 is out and thanks to Wing for producing this. I had a chance to participate as a voter, and I must say the original list was quite impressive and left out lots of amazing names. That being said, here’s a snippet of the mid stage companies who have raised $25 -100mm and congrats to Superhuman (a portfolio co). Of note, 80% of the Enterprise Tech 30 use a PLG (product led growth model) and 36% are open source. Other trends include 29% in data, 32% in productivity/collaboration, and 16% in cloud security. As always, 🙏🏼 for reading and please share with your friends and colleagues. Scaling Startups
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