SaaS

“Cloud, if you look at it is something like if you take SAS and public cloud is maybe, you know, 220 to two hundred and forty billion dollar market. So relative to the four trillion dollar market, we're only about six percent of the way there.”

“You know, and we see this a lot in companies, which is, as purchasing decisions have moved away from kind of the CIO as the central, you know, kind of purchasing control of all these things, and now you've got department level purchases, and you see a bunch of…”

“But when they actually accelerate that growth, they'll go into an even deeper negative cash flow, and then when they come back up to reach profitability, they'll start growing faster, and that's that, like, that balance that a lot of investors and sort of boar…”

“You know, you really don't know. So you have to the stickiness of your customers really dictated by in part by the product really, because in a you have constant updates. If you're a Salesforce customer, if you're a any SAS model customer, you're constantly ge…”

“That profitability doesn't happen until a certain period in, in the customer's lifetime, but once they become profitable, you have this huge existing base of customers that are paying you recurring revenue over time, and your margins are actually higher than a…”

“Now that is trivial, because of software as a service, because of mobile, because of these platforms. So, Getting the data has become, you know, orders of magnitude easier, and so the next job is really, what do you do with it?”

“Fundamentally, if you're looking at the sales and marketing expense on the P and L of a SAS company, you're comparing that to the revenue this period on the P and L of the SAS company, you're comparing the wrong thing, right? You're comparing an investment tha…”

“How he built success factors and achieved the first great outcome in software as a service”

“Really the whole indoctrination of open source and SaaS as a starting point is a marketing vehicle to build a pipeline for an organization.”

“There may be a power shift happening from on the one hand, large companies to small and medium companies that can now more aggressively adopt technology faster. And then from companies in the U S and Western Europe to companies all over the world that can also…”

“When open source is offered as a service, the pricing. Is based on the service that you actually provide, and it makes for a very nice way to work around some of the nuances of open source and the whole, what's your support model and all these other bits and p…”

“We've seen many companies, you start with a cloud, I'll say a cloud SaaS offering based on open source. Viral adoption, great uptake. And then enterprises say, well, like we need to have that inside our firewall. We want a copy of that. So then the expansion, …”

“Well, the element, I believe, that has brought open source from fringe hobby project out of academia to mainstream is the fact that you can actually build commercial businesses On top of open source. Right. And a lot of that, which you guys at Databricks are d…”

“I still think there's a dozen billion dollar plus companies to be created where you're just taking something that everybody's building internally over and over again, and you're just turning it into an API.”

“The data I see is something, it's like sub 10% of corporate applications today are still, You know, it's unbelievably low, right?”

“Like the software, the work feels like 10 years ago. So I, one interpretation I think is what's happening right now is we're just upgrading all that stuff, and that's how, that's quote unquote SaaS and all these other kinds of things going on, and it's, there'…”

“Well, until you, until the human literally is not a seat on the system, I think you don't remove the end user license as a component.”

“I think if you ask like 90%, if you ask the world population, you know, you probably find that 90 plus percent just don't care enough. They just don't like, they don't care about the tabs on their software and the modules on their dashboard. Like it's like the…”

“AI is changing the value prop of software. You know, it's kind of doing two things at once. One, it's like the software is not doing work on your behalf. And so the core value of the software is not who in my org has access to the data. It's like, what can thi…”

“This is, the thing that AI is, is an accelerant in building the product. Whereas what sass and the cloud did was accelerate getting paid.”

“I think it's going to look like what we saw in something like SAS or cloud, which is the incumbents get bigger, but then there's all of these new categories that we would not have been able to predict. And then there's lots of 10 and 20 and fifty and one hundr…”

“And the nature of AI because of scaling laws, Richard Sutton's the better listen they're just more compute intensive. So their gross margins are structurally going to be lower. But that doesn't mean they can't be great businesses. I just, I think it's going to…”

“I definitely do not believe that it will be the majority pricing manner for all software or all SaaS based software, because when you talk to customers, they hate it.”

“On the other side, the stuff that's all beta is really gonna struggle. And you can almost argue, like, maybe the beta wasn't that valuable to begin with.”

“I was talking to some folks the other day and like an AI native startup, and they're basically trying to, they have a bunch of vibe coders and all the vibe coders are just trying to build internal tools that replace their SaaS. That they're paying for.”

“Now with AI, many companies can do something like that. Like a non-Chinese tech company can be like a Chinese tech company where it can have a lot more, let's call it digital autarky.”

“The point about the Chinese tech ecosystem is because they arose in a low trust society, They don't have SaaS, not in the same way that we do.”

“Everybody that built a SaaS business or a software business is like, the game is, can you build really, really high quality APIs? Can you have a way of monetizing that? You know, do you have a way of handling the identities and all of the access controls for a…”

“Now, someone might come up with a very clever pricing scheme, and that agents, you know, somehow cost less, because maybe for the first five years they're read only, or they, they're always tied to a person or something, but it is another seat. There is no way…”

“What does this do to software, and the answer is, more software, like, way more software. I mean, all software companies exist to solve problems created by other software companies, and that was the joke in security, like, All security software exists to solve…”

“Forward deployed engineers are necessary or newly necessary for early stage AI companies because the workflows are new. Right? If you're building a SaaS company five years ago, most SaaS products are pretty well explored, right? Like you roughly know what the …”

“So the TAM of AI can be 10 X plus bigger than traditional SaaS or healthcare IT.”

“We've reached a hundred billion in revenue in AI. It took SaaS 15 years to get to the same point. AI did that in four years.”