Our CEO (second from the right) was part of a spirited panel last week on "SaaS in Difficult Times" together with SaaS leaders NetSuite, Opsource, Cornerstone OnDemand, Xactly and Eloqua.
It was a candid session where leading CEOs were very frank about the impact of the economy on their companies. The challenges in the global economy -- and thus with our customers -- were contrasted with Salesforce.com having officially crossed $1,000,000,000 in annualized revenue that day.
A few themes emerged:
- SaaS leaders were not seeing much of an impact on "net adds", or the rate at which they added new customers, generally speaking. Customers are still flocking to SaaS over more expensive and complicated on-premise solutions.
- Larger, enterprise deals were seen as a sweet spot, with many leaders buying more and taking advantage of the downturn to lock in longer-term, discounted deals with SaaS vendors
- The mid-market was seen as the tough spot at least for seat-based business models, where customers may be happy, but downsizing simply leads to buying less seats
- Sales cycles are much longer
- Every SaaS company was planning for slower growth in 2009+, which interestingly, is leading to greater profitability. Without so much expense for sales and marketing front-loaded to fuel maximum growth, it's much easier for recurring-revenue models to grow their cash bases by growing more moderately.
It was a terrific discussion. As a highly related reminder, if you are an EchoSign Enterprise customer -- try our anonymous, opt-in benchmarking. You'll be able to track in real-time, and over time, just how the sales cycles and close rates are of your peer group. Our SaaS group's sales cycles have grown 64% since November 2008, for example. Interested to track this type of data over time? Just join a peer group on the Admin tab of your account.
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