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STATE OFTHE
CLOUD REPORT 2018Byron Deeter, Kristina Shen,Anna Khan
w w w . b v p . c o m / c l o u d
2017a look back
100,000
10,000
1,000
100
10
1.0000
0.1000
0.0100
0.0010
0.0001
2010 2012 2014 2016
USD
BITCOIN
MILLIONAIRES!
Source: Reddi...
WHILETHE JURY IS OUT ON BITCOIN…
4Source: Headline from CNBC article on Erik Finman. Author: Michelle Castillo. June 2017....
BOTMANIA;
THE MACHINES
WILLTAKE OVER!
REVENGE OFTHE NERDS
Source: VisualCapitalist.com
Top 5 Publicly Traded Companies (by Market Cap)
2006
$446B $383B $327B $2...
REVENGE OFTHE NERDS
Source: VisualCapitalist.com
Top 5 Publicly Traded Companies (by Market Cap)
2006
2011
$406B $376B $27...
REVENGE OFTHE NERDS
Source: VisualCapitalist.com
Top 5 Publicly Traded Companies (by Market Cap)
2006
2011
2016
$582B $556...
9
Source: Make A GIF
0
4000
8000
12000
16000
2015 2016 2017
IPO MARKET IS OPENING BACK UP, BUT STILL BELOW
HISTORICALAVERAGES
2015
Total
$15.6B...
CLOUD INDEX CONTINUESTO OUTPERFORM
Source: BVP Cloud Index.
Coming soon…
11
5
10
0
2
4
6
8
10
12
2006 2016
AverageYears to IPO
2006 vs. 2016
AVERAGEAGE OFATECH COMPANY IPO INCREASED
2X INTHE LAST DE...
$26
$84
0
10
20
30
40
50
60
70
80
90
2013 2017
Total Private Capital Invested in Technology Companies ($B)
ENABLED IN PART...
0
50
100
150
200
250
2013 2014 2015 2016 2017
# of Private CompaniesValued at $1B+
A DECADEAGO,A $1B PRIVATEVALUATIONWAS
U...
1003
857
769
0
200
400
600
800
1000
1200
2015 2016 2017
# ofVC-Backed Exits, 2015-2017
DESPITE MORE MONEY RAISEDAND MOREVA...
ALMOSTAS MANY PRIVATE CLOUD UNICORNSAS
PUBLIC CLOUD UNICORNSTODAY!
37 44
PRIVATE PUBLIC
16Source: BVP Cloud 100 List & BVP...
A NEW
VALUATION
FRAMEWORK
Revenue Multiple
RAISING EARLY STAGE FUNDINGA DECADEAGO
%YoYRevenueGrowth
Public
30%
YoY Growth
0x 5x 10x
Private
(A Decad...
Revenue Multiple
RAISING EARLY STAGE FUNDINGTODAY
%YoYRevenueGrowth
Private
(A Decade Ago)
100%
YoY Growth
30%
YoY Growth
...
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016 2017 2018 2019
On	Prem SaaS
Source:	IDC,	Worldwide	En...
USVC Activity ($B) by Sector
Cloud funding
has grown 4x
and to 50% of
total funding
in 6 years
...AND HIGHVC INTEREST IN C...
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
0.5 Yr 1 Yr 1.5 Yr 2 Yrs 2.5 Yrs 3 Yrs 3.5 Yrs
ARR(in$M)
Years from $1M to $10M ARR
Sour...
THE BVP GROWTH BENCHMARK
From $1mm ARR
GOOD
4
Years
Double
Annually
BETTER
3
Years
Triple,
Double,
Double
BEST
2
Years
Tri...
4.4x
6.0x
6.9x
15.9x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
2011 2012 2013 2014 2015 2016 2017
Public - BV...
4.4x
6.0x
6.9x
15.9x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
2011 2012 2013 2014 2015 2016 2017
Public	- BV...
48%
25%
170%
259%
0%
50%
100%
150%
200%
250%
300%
2011	- Public 2017	- Public 2011	- Private 2017	- Private
Median % YoY G...
THE BVPARRG METRIC
ARRG
Multiple
=
ARR
Multiple
Growth
(YoY)
THE BVPARRG METRIC: EXAMPLE
6.7x
ARRG
Multiple
=
10x
150%
4.4x
6.0x
6.9x
15.9x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
2011 2012 2013 2014 2015 2016 2017
Public - BV...
4.4x
6.0x6.9x
15.9x
7.7x
7.6x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
2011 2012 2013 2014 2015 2016 2017
Pu...
4.4x
6.0x6.9x
15.9x
7.7x
7.6x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
2011 2012 2013 2014 2015 2016 2017
Pu...
4.4x
6.0x6.9x
15.9x
7.7x
7.6x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
2011 2012 2013 2014 2015 2016 2017
Pu...
4.4x
6.0x6.9x
15.9x
7.7x
7.6x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
2011 2012 2013 2014 2015 2016 2017
Pu...
SERIESA/BVALUATION FRAMEWORK
GOOD 50- 100%
CARR
%Growth
BETTER
BEST
100- 200%
200%+
1
24
CAC
PAYBACK
Mos
12- 24
<12
2
1-3%...
2018 PREDICTIONS
2013 CLOUD
ROADMAPS
Mobile Sales ForceAutomation1.
Quantitative Marketing 2.
IT/Data Management3.
CFO Software 4.
Regional...
BVP ROADMAP INVESTMENTS
INTHE LAST 5YEARS
MobileSalesForce
Automation1.
Quantitative
Marketing 2.
IT/Data
Management3.
CFO...
2018 PREDICTIONS
BY CLOUD LAYER
IAAS
PAAS
FAAS
SAAS
...AND SOFTWARE IS GETTING HARDER.
#1 RISE OF SERVERLESS COMPUTING
Bare metal
1950s – 2000s
Virtualization
2000s-2014
Cont...
...AND SOFTWARE IS GETTING HARDER.WHY NOW?
40
DRIVEN BY 3 MACROTRENDS
Docker made containers
more dev-friendly
More, scalableAPIs Open Source more available
and accepte...
FUTURE IS IN MANAGING CONTAINERSAT SCALE
Increased container usage
How do I use a
cointainer?
How can these containers
wor...
2018 PREDICTIONS
BY CLOUD LAYER
IAAS
PAAS
FAAS
SAAS
Mapping
Payments
Communication
(Messaging/Voice)
Email
SSO
Customer
Engagement
Storage
Enterprise Search
Media
Background ...
BLOCKCHAIN FINDSA HOME INTHE ENTERPRISE
#3
FOOD AVIATIONRETAIL
45
...AND SOFTWARE IS GETTING HARDER.SOFTWARE AND PAYMENTS USED TO LIVE APART
SOFTWARE VENDORS MERCHANT ACQUIRERS
46
...AND SOFTWARE IS GETTING HARDER.
#4 PAYMENTS-AS-A-SERVICE
47
2018 PREDICTIONS
BY CLOUD LAYER
IAAS
PAAS
FAAS
SAAS
THE MOVE FROM SYSTEM OF RECORDTO
SYSTEM OF RESULTS#5
49
THE SCREENLESS
SOFTWARE MOVEMENT#6
50
VOICE ISTHE NEXT SOFTWARE BATTLEGROUND
devices sold
20M*
*Source: Estimates based on AMZN earnings call. Voicebot.ai, Octo...
2018 PREDICTIONS
BY CLOUD LAYER
IAAS
PAAS
FAAS
SAAS
VALUES CREATEVALUE
#7
53
START EARLYAND
REITERATE OFTEN,VISION
ANDVALUES FROM DAY 1
It’s all about the culture
Happy
We are passionate and know how...
#8 THE CLOUD IS FLAT; INNOVATION OUTSIDE
THEVALLEY
55
2018 PREDICTIONS
BY CLOUD LAYER
IAAS
PAAS
FAAS
SAAS
BVP’S 8 PREDICTIONS
FOR 2018
API’s drive innovation
1.
Payments-as-a-
Service
2.
Blockchain in the Enterprise3.
Move from ...
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State of the Cloud Report 2018 - Bessemer Venture Partners

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The fourth annual State of the Cloud has arrived! As the definitive guide to the biggest trends in the cloud industry, Bessemer Venture Partners’ State of the Cloud 2018 includes:

-A look back at 2017
-A new valuation framework for early-stage investing in private cloud companies
-Bessemer’s eight cloud predictions for 2018

Published in: Technology
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State of the Cloud Report 2018 - Bessemer Venture Partners

  1. 1. STATE OFTHE CLOUD REPORT 2018Byron Deeter, Kristina Shen,Anna Khan w w w . b v p . c o m / c l o u d
  2. 2. 2017a look back
  3. 3. 100,000 10,000 1,000 100 10 1.0000 0.1000 0.0100 0.0010 0.0001 2010 2012 2014 2016 USD BITCOIN MILLIONAIRES! Source: Reddit, Bitcoin prince since inception on a log scale
  4. 4. WHILETHE JURY IS OUT ON BITCOIN… 4Source: Headline from CNBC article on Erik Finman. Author: Michelle Castillo. June 2017. Source: Leo Image from Wolf of Wall Street Movie.
  5. 5. BOTMANIA; THE MACHINES WILLTAKE OVER!
  6. 6. REVENGE OFTHE NERDS Source: VisualCapitalist.com Top 5 Publicly Traded Companies (by Market Cap) 2006 $446B $383B $327B $293B $273B 6
  7. 7. REVENGE OFTHE NERDS Source: VisualCapitalist.com Top 5 Publicly Traded Companies (by Market Cap) 2006 2011 $406B $376B $277B $237B $228B $446B $383B $327B $293B $273B 7
  8. 8. REVENGE OFTHE NERDS Source: VisualCapitalist.com Top 5 Publicly Traded Companies (by Market Cap) 2006 2011 2016 $582B $556B $452B $364B $359B $406B $376B $277B $237B $228B $446B $383B $327B $293B $273B 8
  9. 9. 9 Source: Make A GIF
  10. 10. 0 4000 8000 12000 16000 2015 2016 2017 IPO MARKET IS OPENING BACK UP, BUT STILL BELOW HISTORICALAVERAGES 2015 Total $15.6B 2016 Total $7.4B 2017 Total $11.5B Source: CapIQ. IPO Data from NASDAQ. Companies included are on BVP Cloud Index. Value is determined by market cap end of first day of trading. 10
  11. 11. CLOUD INDEX CONTINUESTO OUTPERFORM Source: BVP Cloud Index. Coming soon… 11
  12. 12. 5 10 0 2 4 6 8 10 12 2006 2016 AverageYears to IPO 2006 vs. 2016 AVERAGEAGE OFATECH COMPANY IPO INCREASED 2X INTHE LAST DECADE $573m Average Market Cap at IPO in 2009 ~$1B Average value now Source: Nasdaq, Trever Nath, 2016 Source: CapIQ and Pitchbook. 12
  13. 13. $26 $84 0 10 20 30 40 50 60 70 80 90 2013 2017 Total Private Capital Invested in Technology Companies ($B) ENABLED IN PART BY HUGE GROWTH IN PRIVATE CAPITALAVAILABLETO SOFTWARE STARTUPS (3X GROWTH IN FOUR YEARS) Source: NVCA 2017 Report 13
  14. 14. 0 50 100 150 200 250 2013 2014 2015 2016 2017 # of Private CompaniesValued at $1B+ A DECADEAGO,A $1B PRIVATEVALUATIONWAS UNHEARD OF…NOWTHEREARE MORETHAN 200! Source: Dow Jones Venture Source, The Wall Street Journal. “WSJ Billion Dollar Startup Club.” Exhibit 10. As of June 30, 2017. Source: Logos included are a sampling of companies that became ”unicorns” that year. 14
  15. 15. 1003 857 769 0 200 400 600 800 1000 1200 2015 2016 2017 # ofVC-Backed Exits, 2015-2017 DESPITE MORE MONEY RAISEDAND MOREVALUABLE COMPANIES,VC-BACKED EXITS DECLINED FORTHE 3RD CONSECUTIVE YEAR IN 2017 Source: NVCA 2017 Report 15
  16. 16. ALMOSTAS MANY PRIVATE CLOUD UNICORNSAS PUBLIC CLOUD UNICORNSTODAY! 37 44 PRIVATE PUBLIC 16Source: BVP Cloud 100 List & BVP Cloud Index.
  17. 17. A NEW VALUATION FRAMEWORK
  18. 18. Revenue Multiple RAISING EARLY STAGE FUNDINGA DECADEAGO %YoYRevenueGrowth Public 30% YoY Growth 0x 5x 10x Private (A Decade Ago) 100% YoY Growth 18
  19. 19. Revenue Multiple RAISING EARLY STAGE FUNDINGTODAY %YoYRevenueGrowth Private (A Decade Ago) 100% YoY Growth 30% YoY Growth 0x 5x 10x Private (TODAY) 100-300% YoY Growth 20X Public 19
  20. 20. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015 2016 2017 2018 2019 On Prem SaaS Source: IDC, Worldwide Enterprise Application Spend by SaaS and On-Prem, 2013-2018. 75% 25% 15% 85% SaaS Adoption Easier to Start a Cloud Company Source: 2016 data from nordicapis.com. 2005-2015 data from rubenverborgh.girhub.io and 200-2004 data from blog.cutter.com 0 5000 10000 15000 20000 25000 30000 35000 2000 2006 2012 2018 API Growth (# of APIs) from 2000-2018 WHAT’S CHANGED? 20
  21. 21. USVC Activity ($B) by Sector Cloud funding has grown 4x and to 50% of total funding in 6 years ...AND HIGHVC INTEREST IN CLOUD 21
  22. 22. $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 0.5 Yr 1 Yr 1.5 Yr 2 Yrs 2.5 Yrs 3 Yrs 3.5 Yrs ARR(in$M) Years from $1M to $10M ARR Source: CapIQ internal sources and company announcements.. Note: Use quarterly revenue times four as a proxy for ARR. HOW FAST DOTOP CLOUD COMPANIES GROW TODAY? 22
  23. 23. THE BVP GROWTH BENCHMARK From $1mm ARR GOOD 4 Years Double Annually BETTER 3 Years Triple, Double, Double BEST 2 Years Triple, Triple Years to $10MARR Implied Growth Multiple byYear 23
  24. 24. 4.4x 6.0x 6.9x 15.9x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 2011 2012 2013 2014 2015 2016 2017 Public - BVP Cloud Index - NTM Mult Private - ARR Mult Revenue Multiples – Public vs Private ($1-20M ARR) Note: Public - BVP Cloud Index includes 78 publically traded companies over time (includes acquired companies historically) and shows NTM revenue multiples. Private - Includes 74 private valuation transactions between 2010 and Jan’18 with ARR between $1M - $20M. Takes the average ARR multiple within each year. 2010 transactions are included in 2011 (given limited data). 2018 transactions are included in 2017. PRIVATE MULTIPLES HAVE OUTPACED PUBLIC MULTIPLES... 24
  25. 25. 4.4x 6.0x 6.9x 15.9x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 2011 2012 2013 2014 2015 2016 2017 Public - BVP Cloud Index - NTM Mult Private - ARR Mult Revenue Multiples – Public vs Private ($1-20M ARR) Note: Public - BVP Cloud Index includes 78 publically traded companies over time (includes acquired companies historically) and shows NTM revenue multiples. Private - Includes 74 private valuation transactions between 2010 and Jan’18 with ARR between $1M - $20M. Takes the average ARR multiple within each year. 2010 transactions are included in 2011 (given limited data). 2018 transactions are included in 2017. PRIVATE MULTIPLES HAVE OUTPACED PUBLIC MULTIPLES... 1.5x Private / Public 2.5x Private / Public 25
  26. 26. 48% 25% 170% 259% 0% 50% 100% 150% 200% 250% 300% 2011 - Public 2017 - Public 2011 - Private 2017 - Private Median % YoY Growth – Public vs Private ($1-20M ARR) Note: Public - BVP Cloud Index includes 78 publically traded companies over time (includes acquired companies historically). Private - Includes 74 private valuation transactions between 2010 and Jan’18 with ARR between $1M - $20M. 2010 transactions are included in 2011 (given limited data). 2018 transactions are included in 2017. ... BUT PRIVATE COMPANIESARE GROWING MUCH FASTER EACH YEAR 26
  27. 27. THE BVPARRG METRIC ARRG Multiple = ARR Multiple Growth (YoY)
  28. 28. THE BVPARRG METRIC: EXAMPLE 6.7x ARRG Multiple = 10x 150%
  29. 29. 4.4x 6.0x 6.9x 15.9x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 2011 2012 2013 2014 2015 2016 2017 Public - BVP Cloud Index - NTM Mult Private - ARR Mult Revenue Multiples – Public vs Private ($1-20M ARR) Note: Public - BVP Cloud Index includes 78 publically traded companies over time (includes acquired companies historically) and shows NTM revenue multiples. Private - Includes 74 private valuation transactions between 2010 and Jan’18 with ARR between $1M - $20M. Takes the average ARR multiple within each year. 2010 transactions are included in 2011 (given limited data). 2018 transactions are included in 2017. WHILEARR MULTIPLES LOOK HIGH... 29
  30. 30. 4.4x 6.0x6.9x 15.9x 7.7x 7.6x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 2011 2012 2013 2014 2015 2016 2017 Public - BVP Cloud Index - NTM Mult Private - ARR Mult Private - ARRG Mult Revenue Multiples – Public vs Private ($1-20M ARR) Note: Public - BVP Cloud Index includes 78 publically traded companies over time (includes acquired companies historically) and shows NTM revenue multiples. Private ARR Mult - Includes 74 private valuation transactions between 2010 and Jan’18 with ARR between $1M - $20M. Takes the average ARR multiple within each year. 2010 transactions are included in 2011 (given limited data). 2018 transactions are included in 2017. Private ARRG Mult – Takes ARR multiple and divides by YoY growth rate. ...ARRG MULTIPLES HAVE STAYED FLAT 2.5x Private / Public 1.3x Private / Public 30
  31. 31. 4.4x 6.0x6.9x 15.9x 7.7x 7.6x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 2011 2012 2013 2014 2015 2016 2017 Public - BVP Cloud Index - NTM Mult Private - ARR Mult Private - ARRG Mult Revenue Multiples – Public vs Private ($1-20M ARR) Note: Public - BVP Cloud Index includes 78 publically traded companies over time (includes acquired companies historically) and shows NTM revenue multiples. Private ARR Mult - Includes 74 private valuation transactions between 2010 and Jan’18 with ARR between $1M - $20M. Takes the average ARR multiple within each year. 2010 transactions are included in 2011 (given limited data). 2018 transactions are included in 2017. Private ARRG Mult – Takes ARR multiple and divides by YoY growth rate. SOME BUMPSALONGTHEWAY... Public Markets Over-Valued 31
  32. 32. 4.4x 6.0x6.9x 15.9x 7.7x 7.6x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 2011 2012 2013 2014 2015 2016 2017 Public - BVP Cloud Index - NTM Mult Private - ARR Mult Private - ARRG Mult Revenue Multiples – Public vs Private ($1-20M ARR) Note: Public - BVP Cloud Index includes 78 publically traded companies over time (includes acquired companies historically) and shows NTM revenue multiples. Private ARR Mult - Includes 74 private valuation transactions between 2010 and Jan’18 with ARR between $1M - $20M. Takes the average ARR multiple within each year. 2010 transactions are included in 2011 (given limited data). 2018 transactions are included in 2017. Private ARRG Mult – Takes ARR multiple and divides by YoY growth rate. SOME BUMPSALONGTHEWAY... Public Markets Over-Valued Private Markets Over-Valued 32
  33. 33. 4.4x 6.0x6.9x 15.9x 7.7x 7.6x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 2011 2012 2013 2014 2015 2016 2017 Public - BVP Cloud Index - NTM Mult Private - ARR Mult Private - ARRG Mult Revenue Multiples – Public vs Private ($1-20M ARR) Note: Public - BVP Cloud Index includes 78 publically traded companies over time (includes acquired companies historically) and shows NTM revenue multiples. Private ARR Mult - Includes 74 private valuation transactions between 2010 and Jan’18 with ARR between $1M - $20M. Takes the average ARR multiple within each year. 2010 transactions are included in 2011 (given limited data). 2018 transactions are included in 2017. Private ARRG Mult – Takes ARR multiple and divides by YoY growth rate. DESPITE SEEMINGLY HIGH PRIVATE COMPANY VALUATIONS, MULTIPLES CAN BE JUSTIFIED! Growth adjusted, private valuations are more reasonable 6.7x Median ARRG 33
  34. 34. SERIESA/BVALUATION FRAMEWORK GOOD 50- 100% CARR %Growth BETTER BEST 100- 200% 200%+ 1 24 CAC PAYBACK Mos 12- 24 <12 2 1-3% CHURN (Monthly) <1% Net negative 3 <1 CASH FLOW EFFICIENCY -1 >1 4 34
  35. 35. 2018 PREDICTIONS
  36. 36. 2013 CLOUD ROADMAPS Mobile Sales ForceAutomation1. Quantitative Marketing 2. IT/Data Management3. CFO Software 4. Regional SaaS5. HR 2.0 6. Consumerized SaaS for SMB7. PaaS/Business to Developer (B2D)/Developer Citizenry 8. 36
  37. 37. BVP ROADMAP INVESTMENTS INTHE LAST 5YEARS MobileSalesForce Automation1. Quantitative Marketing 2. IT/Data Management3. CFOSoftware 4. Regional SaaS5. HR2.0 6. Consumerized SaaSforSMB7. PaaS/BusinesstoDeveloper (B2D)/DeveloperCitizenry 8. 37
  38. 38. 2018 PREDICTIONS BY CLOUD LAYER IAAS PAAS FAAS SAAS
  39. 39. ...AND SOFTWARE IS GETTING HARDER. #1 RISE OF SERVERLESS COMPUTING Bare metal 1950s – 2000s Virtualization 2000s-2014 Containers 2014 - Present Serverless 2016 - Present Hardware Operating system Process Function Hardware Operating system Function Process Hardware FunctionFunction ProcessProcess Operating systemOperating system Hardware More agility, but also more complexity 39
  40. 40. ...AND SOFTWARE IS GETTING HARDER.WHY NOW? 40
  41. 41. DRIVEN BY 3 MACROTRENDS Docker made containers more dev-friendly More, scalableAPIs Open Source more available and accepted Source: Black Duck Software, 2015, Future of Open Source 41
  42. 42. FUTURE IS IN MANAGING CONTAINERSAT SCALE Increased container usage How do I use a cointainer? How can these containers work together? How do I secure and monitor my containers? How do I manage containers at scale? • Operations management • DevSecOps • Visibility • Testing • Migration • New services 42
  43. 43. 2018 PREDICTIONS BY CLOUD LAYER IAAS PAAS FAAS SAAS
  44. 44. Mapping Payments Communication (Messaging/Voice) Email SSO Customer Engagement Storage Enterprise Search Media Background Check Collaboration IaaS User Management Identification Social AI Banking Location HealthcareSecurity/Fraud Test/Monitor API’S DRIVE INNOVATION #2 VideoShipping Logistics 44
  45. 45. BLOCKCHAIN FINDSA HOME INTHE ENTERPRISE #3 FOOD AVIATIONRETAIL 45
  46. 46. ...AND SOFTWARE IS GETTING HARDER.SOFTWARE AND PAYMENTS USED TO LIVE APART SOFTWARE VENDORS MERCHANT ACQUIRERS 46
  47. 47. ...AND SOFTWARE IS GETTING HARDER. #4 PAYMENTS-AS-A-SERVICE 47
  48. 48. 2018 PREDICTIONS BY CLOUD LAYER IAAS PAAS FAAS SAAS
  49. 49. THE MOVE FROM SYSTEM OF RECORDTO SYSTEM OF RESULTS#5 49
  50. 50. THE SCREENLESS SOFTWARE MOVEMENT#6 50
  51. 51. VOICE ISTHE NEXT SOFTWARE BATTLEGROUND devices sold 20M* *Source: Estimates based on AMZN earnings call. Voicebot.ai, October 2017. devices sold 7M* devices sold ? 51
  52. 52. 2018 PREDICTIONS BY CLOUD LAYER IAAS PAAS FAAS SAAS
  53. 53. VALUES CREATEVALUE #7 53
  54. 54. START EARLYAND REITERATE OFTEN,VISION ANDVALUES FROM DAY 1 It’s all about the culture Happy We are passionate and know how to have a good time. We cultivate happiness inside and outside the office. Hungry We are go-getters and innovators.We always look for ways to raise the bar. Humble We have a people and customer-first mindset.Arm-in- arm, we play to win as a team. Honest We are transparent and honest with ourselves.We act with integrity and actions that would make our loved ones proud. 4H’s 54
  55. 55. #8 THE CLOUD IS FLAT; INNOVATION OUTSIDE THEVALLEY 55
  56. 56. 2018 PREDICTIONS BY CLOUD LAYER IAAS PAAS FAAS SAAS
  57. 57. BVP’S 8 PREDICTIONS FOR 2018 API’s drive innovation 1. Payments-as-a- Service 2. Blockchain in the Enterprise3. Move from System of Record to System of Results 4. Screenless Software Movement 5. Rise of Serverless Computing 6. Values CreateValue7. The Cloud is Flat 8. 57

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