SaaSletter - New Feb'23 SaaS Demand Index

New: a Publicly Traded vs Private trend comparison.

I’m excited to update the SaaS Demand Index with data through February 2023.

For our new readers: the Demand Index is derived from high-intent (aka “okta pricing”) Google Search volume data.

PDF slides here.

Reminder: this is a directional, free, and ever-evolving analysis that I’m open-sourcing → always do your own due diligence.

Industry-Wide Data

Looking through the “December down, January up” seasonality pattern (see past issue), I would characterize February 2023 demand data as “decent.”

A new analysis: comparing publicly traded SaaS to their private counterparts (in bottom graph) = no consistent top-of-the-funnel divergences since fall 2021:

Notably, RepVue (think Glassdoor for sales) data shows publicly traded companies outperforming in terms of quota attainment:

Taking our TOFU data and RepVue’s bottom-of-funnel (BOFU) data, it *might* suggest public companies are converting their funnel at a much higher rate.

(Of course, the quota attainment gap might be explained simply by staffing levels - mature public companies have predictable sales orgs less prone to overhiring vs startups + scale ups overestimating + overhiring their growth curves).

Interestingly, our customer size data (see top graph above) and RepVue’s data both show Middle Market as the top-performing segment.

Trends By Product Category

The trends at the product category level remain consistent and in line with consensus industry narratives:

Once again, Development + IT Management and Security are the strongest performing categories on an LTM basis.

Maybe a surprise: Sales is #3 on an LTM basis.

All of the category drill-downs - like this Data + Analytics example - are available in this PDF:

Data + Analytics lag is persistent at this point

Even More SaaS Content

Battery Ventures released a very thorough “State of Cloud Software Spending - March 2023” report. Highly encourage you to read the entire deck. Some excerpts threaded here:

Matt Harney @SaaSletter

Top 5 priorities by category = in-line with consensus narratives /2

Three excellent software Substack posts:

1. “Ellison’s Gospel, The Evolution of Salesforce, and the (AI Driven) Re-Bundling of Software” by

   Arda Capital

2. “The Race to $100B: The Palo Alto Networks Story” - on @Software Analyst Newsletter

3. “The Software Slog” - from

   Buck on Software

Enterprise Technology Research (ETR) survey showing real deterioration in tech spending for the Global 2000:

MarkETR @mdsmaldon

@BucknSF @SaaSletter neg G2K IT spend growth in 1Q and 2Q ... (past 3 quarterly survey view)

Buck calling for a bad Q1 2023:

Buck @BucknSF

The narrative I am leaning into is Q1 will be shit and GTLB being late to report is giving latest view on how shit

Some Final Tweets

staysaasy @staysaasy

There are 2 types of people in the world: * People who buy software from live sandboxes * People who buy software from slides You can get rich selling software to either or both of these groups but they might as well be different species.

hiten.eth @hnshah

When digging into customer sentiment for enterprise b2b companies, it seems like most don’t actually have product/market fit. Disruption opportunities are endless.