Mar 14, 2021 · 49m · saastr
The State of the Cloud: 2021 with Bessemer Venture Partners | SaaStr Software Community
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Bessemer Venture Partners presents their 2021 State of the Cloud report at SaaStr, analyzing how the global pandemic accelerated public and private cloud growth, introducing proprietary benchmarks like Growth Endurance, breaking down modern go-to-market strategies, and unveiling seven strategic cloud predictions for the future.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Jason as informed peer 0.0 Guest teaching 0.0 Guest disagreement 0.0 Jason pushing back 0.0
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 23:45 Analytical presentation of valuation drivers
This is a scripted keynote presentation with zero combativeness, so this segment represents a purely assertive analytical delivery regarding valuation drivers.
Hardest push from Jason ▶ 0:06 Opening keynote greetingThere is no host present or speaking on the track, resulting in zero pushback throughout the entire episode.
Biggest teaching moment ▶ 28:40 Mary D'Onofrio's Growth Endurance frameworkMary delivers the detailed data and formula behind the 80% and 70% growth endurance rules, serving as the core educational briefing of the presentation.
Jason holds their own ▶ 0:06 Keynote presentation formatThe host does not speak or participate on mic, meaning there is no opportunity for host pushback or hitting back.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| State of the Cloud 2021 Preview and Opening Highlights | 0 | 0 | 0 | 0 | Byron Deeter, Elliott Robinson, and Mary D'Onofrio introduce the State of the Cloud 2021 presentation. As this is a prepared keynote presentation without host participation or debate, all interaction scores are zero. | |
| The Market Shock and Acceleration into the New Normal | 0 | 0 | 0 | 0 | Mary and Byron walk through the market crash of March 2020 and the rapid digital transition into the new normal. The segment is a collaborative presentation by the Bessemer partners. | |
| Macro Industry Transformation and Cloud Leadership in Tech | 0 | 0 | 0 | 0 | Byron details how specific traditional industries like healthcare, education, and construction rapidly adapted to cloud software during the pandemic. There is no host involvement. | |
| Public Cloud Giants Surge Past the Trillion-Dollar Milestone | 0 | 0 | 0 | 0 | Byron presents data on the top five public cloud companies crossing the cumulative one-trillion-dollar market cap milestone. The delivery is entirely analytical and non-adversarial. | |
| Decade of Index Outperformance and the WCLD ETF Launch | 0 | 0 | 0 | 0 | Byron outlines the history of the BVP Emerging Cloud Index and the subsequent performance of the WCLD ETF. This is a solo informational briefing. | |
| Historic Cloud Exits, Mount SaaS, and Software Dominance | 0 | 0 | 0 | 0 | Byron analyzes historic cloud liquidity events such as Snowflake's IPO and Slack's acquisition, introducing the 'Mount SaaS' basket of leaders. No conversational conflict occurs. | |
| Private Cloud Landscape and the Proliferation of Unicorns | 0 | 0 | 0 | 0 | Mary and Elliott examine the private cloud landscape, highlighting the surge in private unicorns past 500 companies. The partners seamlessly hand off speaking duties to one another. | |
| Three Catalysts Driving Unprecedented Cloud Valuations | 0 | 0 | 0 | 0 | Mary breaks down the three core drivers of cloud valuations: multiple expansion, increasing growth rates, and capital supply-demand imbalance. This is a prepared slide breakdown. | |
| Introducing Growth Endurance: The 80% and 70% Rules | 0 | 0 | 0 | 0 | Mary introduces Bessemer's proprietary Growth Endurance metric, illustrating the 80% public and 70% private benchmarks. The delivery is didactic and analytical. | |
| Pivoting Go-to-Market Strategies Away from Field Sales | 0 | 0 | 0 | 0 | Elliott discusses how enterprise go-to-market strategies evolved away from field sales and in-person steak dinners during remote work. The segment contains standard keynote content. | |
| Modern GTM Playbooks: PLG, Usage Pricing, and Marketplaces | 0 | 0 | 0 | 0 | Elliott dives into three modern GTM playbooks: product-led growth, usage-based pricing, and cloud marketplaces. The presentation continues uninterrupted. | |
| Case Study: Hyperscience's Rapid Go-to-Market Adaptation | 0 | 0 | 0 | 0 | Elliott presents a case study on Hyperscience's go-to-market adjustments after Bessemer invested on Black Thursday. There is no host involvement or debate. | |
| Bessemer's Seven Cloud Predictions for 2021 | 0 | 0 | 0 | 0 | Elliott, Mary, and Byron sequentially present Bessemer's seven cloud predictions for 2021. The segment is a structured co-presentation. | |
| Actionable Takeaways, Founder Resources, and Book Giveaway | 0 | 0 | 0 | 0 | Byron wraps up the session with actionable takeaways, website resources, and the Twilio book giveaway. This is standard concluding housekeeping. |
Statements from this episode (27)
Deeter: Telehealth visits experienced a 300x increase during COVID-19
“This is an example of telehealth that has skyrocketed given the cloud And COVID combination, a 300 X increase in telehealth visits.”
Deeter: Two of Top Three Global Companies Appointed Cloud Leaders as CEOs
“It's telling that two of the world's top three market cap companies on the planet have both decided to place their cloud leaders in charge of their entire business.”
Deeter: Top five cloud companies reached $1T market cap after 70% growth
“And so in aggregate, what you see now in total is one trillion dollars of market cap across these top five companies. And they on average saw a 70% increase in their market cap over the last year, since we came to you in SASTR of 20 20.”
Deeter: AWS holds over 30% of a $150B cloud market
“And so Amazon Web Services continues to dominate the top over a 30% market share in what is now a hundred and fifty billion dollar market.”
Deeter: Microsoft Azure could challenge AWS for top cloud slot
“At this rate, it is quite possible that Azure competes for AWS for the top slot in the coming years. And we're already seeing signs of that on the enterprise side specifically.”
Deeter: 61 pure-play cloud index companies reached $2.2T market cap
“Now in total with the COVID tailwinds, with the ascendancy of the top five that alone are now at a trillion, and with the addition of the other 56 companies, so 61 in total comprising the cloud index today, You have a shocking 2.2 trillion dollars in market ca…”
Deeter: Bessemer Cloud Index gained over 12x in a decade
“In total over the last decade, the index is up over 12 x, meaning literally if you invested a thousand dollars in this index, put it in a drawer, And pop back present day, you, you'd have 12,000 dollars.”
Deeter: WCLD ETF gained over 100% in a year to top $50 per share
“And as it priced at 25 dollars a share, it has traded up over a hundred percent in the last year at over 50 dollars a share making this one of the top performing ETFs worldwide.”
Deeter: WCLD was the top-performing NASDAQ ETF across all industries in 2020
“This basket propelled WCLD to be the top performing ETF on NASDAQ across all industries. In 2020 and the number two tech ETF in the entire US within tech.”
Deeter: Snowflake had the largest software IPO in history
“Snowflake became the single largest IPO in in software history.”
Deeter: Salesforce paid record 35x multiple for Slack acquisition
“35 X revenue multiple paid for what is a fantastic business by one of the leaders of cloud with Salesforce really showing that this was the second largest enterprise software acquisition in history after only IBM's purchase a red hat, but also the largest mult…”
Deeter: 'Mount SaaS' basket returned 800% over four years vs 330% for FAANG
“If you go back for four years, Mount SaaS had an 800% return
On investment compared to things, 330%.”
Deeter: Cloud will become dominant delivery model for all software in 3 years
“And we do believe that within the next three years, cloud will become the dominant delivery model for all of software in this enabled cloud first world.”
D'Onofrio: Over 527 private unicorns reached $1.9T valuation by January 2021
“As of January, 20, 21, there were over 527 private unicorns with a total cumulative value of over 1.9 trillion dollars.”
D'Onofrio: Forbes Cloud 100 private cloud companies are worth $267B
“And these companies are worth an impressive two hundred and sixty seven billion dollars and include some companies that Bessemer is really proud to work with, such as Procore, Toast, HashiCorp, and Canva.”
Robinson: The number of private unicorns doubled in two years
“But what's crazy to us is that the number of private unicorns has actually doubled, ah, in the past two years.”
D'Onofrio: Emerging cloud index average multiple rose from 5x to over 20x
“The BVP NASDAQ emerging cloud index and it had its average multiple increased by, from about five times forward run rate revenue in 2010 to over 20 times in 2020.”
D'Onofrio: Average Cloud 100 multiple surged from 9x to 23x ARR
“With the average cloud, 100 multiple increasing by over a 150% in the last five years from nine X ARR in 2016 to 23 X in 2020.”
D'Onofrio: Top-quartile private cloud growth reached and held over 100%
“The top quartile companies have increased their growth rates from 65% in 2017 to over a hundred percent in 2019, and were able to maintain that growth rate in 2020, despite a lot of the headwinds that COVID presented.”
D'Onofrio: Private cloud capital grew 10x to over $180 billion
“Over the past decade, there's been a 10 X increase in the number of dollars going into private cloud companies to over a hundred and eighty billion in 2020.”
D'Onofrio: Shopify grew 80% in 2020 to almost $3 billion
“In 2020, it actually grew an incredible 80% In the new normal to almost three billion of revenue.”
D'Onofrio: Twilio averaged over 60% annual revenue growth since IPO
“And instead, Twilio has grown an average of over 60% since IPO with more growth runway to come.”
D'Onofrio: Private cloud growth endurance averages 70% versus 80% public
“So whereas the public cloud landscape had growth endurance of 80%, looking across the past five years of cloud 100 data, our same data set, we find that growth endurance is lower at 70%.”
Robinson: SaaS companies with usage-based pricing get 10% higher public valuations
“When you juxtapose folks that have a usage-based pricing model versus those that have more of the traditional enterprise license or traditional SaaS sales model, we found that the folks that focus on the usage-based pricing model have about a 10% higher Public…”
Robinson: Auth0 reduced sales cycle length by 50% via cloud marketplaces
“AuthZero found that their size cycle, sales cycle diminished by about 50% in this channel alone.”