HubSpot + SAP: New Customer Demand is Down 25%-30% Already

The #1 question founders seem to be asking each other is “What are you seeing?” We’re going to do more on this at SaaStr.

Two new reports from HubSpot and SAP from today are interesting. Hubspot sells primarily to SMBs, and SAP is very enterprise, so the inputs are very different.

What is HubSpot seeing?

Well, according to them, new deal creation across their 70,000+ customer base fell 23% the week of March 30:

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That’s a good proxy for what is happening generally in new deals with SMBs. That’s different of course from renewals, and upsells, and all that. This is SaaS. Your customers should mostly stick with you, if they can.

And what did SAP announce? Most importantly, a 31% decline in license revenue.

Why is license revenue interesting? Because unlike its SaaS businesses, it’s non-recurring. And it’s a new-ish purchase. It’s something a CIO can tap the brakes on quickly. They can try to keep using the older versions of their software. It’s a decent proxy for one piece of enterprise demand.

And it fell 31%:

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Now SAP still announced a 29% growth in cloud revenue. Is this more from upgrades? Probably. Does it lag a bit, because SaaS revenue recurs (and is recognized ratably), unlike license revenue? Almost certainly. Does it should the power of SaaS and recurring revenue? Absolutely.

But deal creating, and new licenses and new logos, are better predictors of what we are seeing right now than renewals and revenue retention.

And HubSpot and SAP are saying things are down 23%-31% right now.

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Published on April 9, 2020

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