May 3, 2018 · 31m · saastr
State of the Cloud: 2018 Edition
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In Bessemer Venture Partners' 'State of the Cloud 2018' keynote, Byron Deeter and Christina Shen analyze macroeconomic SaaS growth, introduce the BVP ARG valuation metric, and outline forward-looking predictions spanning serverless architecture, APIs, enterprise blockchain, and embedded payments.
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 ▶ 1:05 Dismissing Bitcoin speculation to focus on distributed ledger
In a non-combative presentation, Byron makes his sharpest contrast by dismissing the speculative retail hype around crypto prices to refocus attention on fundamental distributed ledger enterprise value.
Hardest push from Jason ▶ 0:00 No host pushback presentThe session is delivered entirely as an onstage keynote presentation by Bessemer partners with no host intervention or pushback throughout the recording.
Biggest teaching moment ▶ 10:25 Explaining the growth-adjusted ARG multipleChristina educates the conference audience on why high ARR multiples in private markets are actually rational when adjusted for accelerating growth using the BVP ARG metric.
Jason holds their own ▶ 0:00 No host hit-back presentBecause this recording consists entirely of a prepared slide presentation with no active host dialogue, there are no instances of host pushback or expertise demonstration.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| 2017 Macro Trends: Crypto, AI, and Tech Dominance | 0 | 0 | 0 | 0 | This is a monologue presentation keynote delivered to a live conference audience with no host presence or interruption. Byron Deeter outlines high-level macro technology trends from 2017 including crypto, AI bots, and tech dominance in market capitalization. With zero conversational friction or host dialogue, all interaction metrics remain at baseline. | |
| Public Cloud Performance and the Unicorn Backlog | 0 | 0 | 0 | 0 | Byron continues the solo presentation, detailing public cloud index gains, low tech IPO volumes, and the backlog of private cloud unicorns. There is no host involvement or disagreement during this conference stage presentation. | |
| Cloud Valuation Frameworks and the BVP ARG Metric | 0 | 0 | 0 | 0 | Christina Shen takes over the stage presentation to introduce Bessemer's growth benchmarks and the BVP ARG metric for cloud valuation. As a solo presentation slide deck, there is no host participation or pushback. | |
| Reviewing Bessemer's Historical Cloud Investment Roadmaps | 0 | 0 | 0 | 0 | Christina reviews Bessemer's historical 2013 roadmaps and portfolio success before handing the presentation back to Byron, who introduces Function as a Service. The format remains a pure conference presentation without host interaction. | |
| 2018 Predictions: API Economy, Blockchain, and Payments as a Service | 0 | 0 | 0 | 0 | Byron delivers 2018 predictions covering the expansion of the API economy, enterprise blockchain use cases, and software embedding payments as a service. No host is present to contest or question the analysis. | |
| 2018 Predictions: Screenless Software, Culture, and Global Cloud Expansion | 0 | 0 | 0 | 0 | Byron concludes the keynote by outlining trends toward screenless enterprise software, culture and corporate values, and the international decentralization of cloud entrepreneurship. The session finishes as a uninterrupted keynote. |
Statements from this episode (16)
Deeter: Blockchain will have a lasting impact on tech
“What we can all agree is that the distributed ledger and this notion of blockchain is gonna have lasting impact to tech, and we'll talk about that later.”
Deeter: Early AI and machine learning are having a lasting impact on software
“The impact of the early instantiation of machine learning in AI is having lasting impact in the software, and that will be impactful as we talk about the macro trends.”
Deeter: The five most valuable companies in 2017 were venture-backed tech
“Then for the first time consistently in 2017, all five of the most highly valued companies on the planet were venture backed technology businesses.”
Deeter: Bessemer Cloud Index gained over 450% in seven years
“The Bessemer Cloud Index, which tracks the 54 pure play public cloud companies, is up over 450% in the seven years we've been tracking this.”
Deeter: Private venture unicorns grew from zero to over 200 in a decade
“And if you think a decade ago, there were zero private venture-backed unicorns, these billion-dollar companies. Now, today, there are over 200.”
Deeter: Cloud 100 list features 37 private cloud companies valued over $1B
“The mean is over a billion, and there are 37 companies over a billion dollars market cap on that list today.”
Shen: Cloud software investment quadrupled in six years, taking 50% of VC
“If you look at what's been invested in cloud software, it has literally quadrupled in a six year time period and represents about 50% of total venture capital funding”
Shen: Private cloud multiples expanded from 1.5x to 2.5x of public multiples
“To be exact, in 2011, private multiples were about 1.5 X out of public companies. But today, they're about 2.5 X.”
Shen: Early-stage private SaaS growth accelerated from 170% to 250% by 2018
“In 2011, they were growing on average of a 170%. These are companies that are between one and twenty million ARR. Today, they're growing about 250%.”
Shen: Growth-adjusted private SaaS valuations remain reasonable relative to public markets
“That means in the last two years, despite seemingly high private company valuations it actually shows on a growth-adjusted basis, private valuations have actually been fairly reasonable.”
Deeter: Serverless computing and FaaS will rival SaaS, PaaS, and IaaS
“We're adding a fourth bucket today, which is for the first time, and I suspect many of you in the room, ah, can't even guess what the acronym stands for. Ah, the hardcore technical folks I bet do immediately. It's Function as a Service. There's the emergence o…”
Deeter: New infrastructure businesses will center on container management at scale
“And so, as you think about where we go from here, specifically around the serverless world, the future is about managing these containers at scale. And at first, what was about the fundamentals of what is a container and how can these work together has very mu…”
Deeter: Stripe and Adyen will be multi-billion dollar successors
“Companies like Stripe and Adyen will certainly be multi-billion dollar successors.”
Deeter: Over half of Shopify's revenue comes from payments
“Now, for those of you that look at the public filings of Shopify another proud Bessemer alumni portfolio company, they're trading at ten billion dollars plus. And over half of their revenue today is from this emerging category of payments.”