Following Snowflake’s blow out quarter, Salesforce has now announced a record quarter as well, growing a stunning 24% at a now $30 Billion in ARR.
In fact, that’s acceleration. At $24B in ARR, Salesforce was growing 20% year-over-year.
“We’re just not seeing material impact on the broader economic world that all of you are in,” Marc Benioff, Salesforce’s co-founder and co-CEO, said on a conference call with analysts.
This isn’t to say a slowdown isn’t coming, or that some industries aren’t impacted. Snowflake also noted certain industries were buying / using less, even if overall growth at the end of the quarter was very strong. And Salesforce noted it’s slowing down hiring, and taking a break from bigger acquisitions, for now. That’s still a cautious note in Salesforce’s optimism and blow-out numbers.
But it’s a reminder to not use the overall global issues and challenges today as an excuse. Some areas of spending are slowing in the economy, but SaaS overall is still growing faster than ever. So if things are slowing down at your startup, be honest about the root cause. Blame “the economy” too much, and you’re doing yourself a disservice. It’s not slowing down Salesforce, Snowflake, or almost any other SaaS or Cloud leader.
2023 $31.8B (guidance)
Thank you Ohana! ❤️ pic.twitter.com/CMhrBXgHSF
— Marc Benioff (@Benioff) May 31, 2022
We may be headed for a big downturn; we’ll see. But it’s not here yet, at least not across the board on average in SaaS. Certainly, public SaaS revenue multiples are way down, and that’s impacted many things, including making VC fundraising substantially harder than in the go-go days of 2021. And some segments of the economy are under stress.
But so far, times are still very good in SaaS, and especially enterprise SaaS.
Don’t just take it from me. Take it from Salesforce, Snowflake, and more. Take it from Gartner, who is now predicting SaaS to grow 20% overall next year to $200 Billion in total sales.
Go forth and conquer. And especially, go close those big deals.
I don’t do a lot of predictions, but I very strongly believe enterprise software companies are going to do really well over the next 18/24 mos…
— Henrique Dubugras (@hdubugras) June 1, 2022