Bessemer's State of the Cloud 2020

Ad

Ad

Ad

Ad

Ad

Ad

Ad

Ad

Ad

Ad

Ad

Ad

Elliott Robinson
Partner
@TheValuesVC
Byron Deeter
Partner
@bdeeter
State of the Cloud 2020
The World Goes Cloud-First
Han...

We’ve had some skeptics
about cloud computing
through the years...

“ Idiocy. Crap. Gibberish.
Crazy. It’s this nonsense.
It’s not water vapor!
All it is, is a computer
attached to a network...

“It’s stupidity.
It’s worse than
stupidity.”
RICHARD STALLMAN

“Mice Nuts”
STEVE BALLMER

Where were we?!

Exponential cloud growth 2000-2020
# of Private Cloud Unicorns | # of Private Cloud Companies
Top private cloud companies
...

Exponential cloud growth 2000-2020
0 | 10’s 1 | 100’s
2000
2010
Top private cloud companies
# of Private Cloud Unicorns | ...

Exponential cloud growth 2000-2020
0 | 10’s 1 | 100’s 86 | 1000’s
2000 2010
2020
Top private cloud companies
# of Private ...

2008 2015 2020
$13.89B
total market
cap
$114.98B
total market cap (8.2x)
$616.1B
total market cap (44x)
$175B
$150B
$125B
...

Public Cloud Landscape 2000
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
Revenue ($M)
FCFMargin
Source: ...

Public Cloud Landscape 2001
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
Revenue ($M)
FCFMargin
Source: ...

Public Cloud Landscape 2002
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2003
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2004
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2005
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2006
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2007
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2008
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2009
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2010
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2011
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2012
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2013
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2014
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2015
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2016
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2017
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2018
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
Source: ...

Public Cloud Landscape 2019
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)Source: C...

Public Cloud Landscape 2020 (LTM)
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
$40 $400 $4,000 $40,000
FCFMargin
Revenue ($M)
So...

$0
$200
$400
$600
$800
$1,000
$1,200
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
In 2015, we predicted the clou...

$0
$200
$400
$600
$800
$1,000
$1,200
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Instead, we hit the mark 2 yea...

$0
$200
$400
$600
$800
$1,000
$1,200
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Public cloud: $1 trillion+
Tot...

$0
$200
$400
$600
$800
$1,000
$1,200
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Public cloud: $1 trillion+
Tot...

SaaS crosses $100B run rate in 2019
Source: Synergy Research Group
0% 5% 10% 15% 20% 25%
Worldwide Market Share Q1 2019
En...

IaaS crosses $100B run rate in 2019
Source: Canalys; SEC Form 10-K filings
OTHERS
32.4%
17.6%
6%
5.4%
38.5%
Amazon dominat...

4/21/20 • Confidential
94%We’re living in a cloud-first world

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201...

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 201...

Cloud is eating software: 2025
Cloud will consume software in 10-15 years
Source: CapIQ; Bessemer Venture Partners analysi...

Cloud is eating software: 2026
Source: CapIQ; Bessemer Venture Partners analysis;
Cloud CAGR – 20%, Software CAGR – 10%
Cl...

Cloud is eating software: 2027
Source: CapIQ; Bessemer Venture Partners analysis;
Cloud CAGR – 20%, Software CAGR – 10%
Cl...

Cloud is eating software: 2028
Source: CapIQ; Bessemer Venture Partners analysis;
Cloud CAGR – 20%, Software CAGR – 10%
Cl...

Cloud is eating software: 2029
Source: CapIQ; Bessemer Venture Partners analysis;
Cloud CAGR – 20%, Software CAGR – 10%
Cl...

Cloud is eating software: 2030
Cloud will consume software in 10-15 years
Source: CapIQ; Bessemer Venture Partners analysi...

Cloud is eating software: 2031
Cloud will consume software in 10-15 years
Source: CapIQ; Bessemer Venture Partners analysi...

Cloud is eating software: 2032
Cloud will consume software in 10-15 years
Source: CapIQ; Bessemer Venture Partners analysi...

Cloud is eating software: 2032
Cloud will consume software in 10-15 years

$172B
Cloud

$456B
Software
$172B
Cloud

$3.7T
Technology
$456B
Software
$172B
Cloud

$3.7T
Technology
$88T
World GDP
$456B
Software
$172B
Cloud
The cloud will
grow beyond
enterprise
software market…
…penetra...

In the cloud economy, scale wins.1
2
3
4
5
6
7
8
9
10
Growth at optimal cost.
Invest behind the cloud sales
and marketing ...

LAW 1:
In the cloud
economy, scale wins
“Reaching scale not only
means you’ve captured a
large slice of the market,
but al...

In the cloud economy, scale wins
Video conferencing
64% 26% 10%
market share market share market share

$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
0 1 2 3 4 5 6 7 8 9 10 11 12
Cloud category leaders scale more rapidly
than ev...

The Second Act sparks a virtuous cycle for
market leadership and expands your TAM
$0
$25
$50
$75
$100
$125
$150
$175
$200
...

A successful “Second Act” drives scale
Payroll, CapitalPoint of Sale
Voice, Video
& Chat
Email
CORE TAM/PRODUCT “SECOND AC...

LAW 3:
Invest behind the cloud
sales and marketing
learning curve
"Be cautious with
investments as you test and
iterate. F...

The sales and marketing learning curve
Initiation
Founder Led Sales
Transition
Sales Led Sales
Execution
Scalable S&M
NAIL...

LAW 9:
Tone starts at the top
“It’s important for leaders
to address talent and
culture like any company
would address chu...

Law 9: Tone starts at the top
69
Volunteer days
20% Project at Google
Diversity in leadership positions
and hiring best pr...

70
Companies give back 1%
of equity, product, and time

4/21/20 • Confidential
2020
PREDICTIONS

Prediction 1: The future of work will be remote
CULTURE
KNOWLEDGE SHARING
ONBOARDING & MANAGEMENT
GLOBAL HR & PAYROLL

Prediction 2: Privacy debt will be the new
technical debt
Jumbo
DATA DE-IDENTIFICATION &
ANONYMIZATION
CONSUMER PRIVACY
MA...

Prediction 3: The cloud industry will continue to
proliferate around the globe

Prediction 4: B2B transactions will move
online
Freight Forwarding
Used Car Auctions
Custom Manufacturing
Enterprise Procu...

Prediction 5: The API universe will drive
innovation across all industries
Shipping
Banking
Payments
Email
SSO
Communicati...

Prediction 6: We’re entering the age of
“automation-at-scale”
INTEGRATED PLATFORM AS A SERVICE
RPA AND ADJACENCIES
SOFTWAR...

4/21/20 • Confidential
2020
BESSEMER’S 6
PREDICTIONS
The future of work will be
remote
Privacy debt will be the new
techni...

Go to bvp.com/cloud
Cloud Giants
Interviews with top CEOs
State of the Cloud 2020
Get the full report

The forecast calls for a high chance of cloud
80
68
MON
Cloudy
64
TUE
Cloudy
63
WED
Cloudy
70
THUR
Cloudy
71
FRI
Cloudy

4/21/20 • Confidential
Resources for cloud founders
Data, reports, and best practices on the industry

Table of contents
Topics
The 6 C’s of cloud finance
Bessemer frameworks and Good, Better, Best
Recommended reading

The 6 C’s of Cloud Finance
The 6 metrics you should use to track and to measure your cloud business
CashConversion
Score
0...

Committed Annual Recurring Revenue (CARR)
What is CARR?
The subscription, recurring revenue that your cloud business earns...

Customer Acquisition Cost (CAC) Payback
What is CAC?
Total sales, marketing, customer success, etc.
costs to acquire a cus...

Customer Lifetime Value (CLTV) / CAC
What is CLTV?
Margin-affected value of a customer to a business over the course of
it...

Churn
What is Dollar Churn?
The dollars that churned or downsell customers represented
e
Why does Dollar Churn Matter?
Onl...

Cash Flow
What is Free Cash Flow (FCF)?
Cash generated after operating and capital expenditures, which adds back non-
cash...

Cash Conversion Score (CCS)
What is Cash Conversion Score (CCS)?
The ratio of CARR to capital raised to date (debt + equit...

The 6 C’s of Cloud Finance
The 6 metrics you should use to track and to measure your cloud business
GOOD
BETTER
BEST
0.25-...

Recommended reading from Bessemer
Roadmaps
• The 10 laws of cloud
• The developer laws
• A cloud for every industry
• B2B ...

Thank You
bvp.com/cloud
@BessemerVP

Bessemer's State of the Cloud 2020

You are reading a preview.

Activate your 30 day free trial to continue reading.

Share SlideShare

Facebook
Twitter
LinkedIn

Embed

Size (px)

Show related SlideShares at end

WordPress Shortcode

Link

LinkedIn
Facebook
Twitter
Email

Replay

Top clipped slide

1 of 87 Ad

1 of 87 Ad