Cloud-Primarily based Software program Corporations Are Recession-Proof, Report Says

News Author

  • Cloud-based enterprise software program corporations appear recession-proof, in keeping with a brand new report from OpenView Enterprise Companions with information from over 1,200 enterprise cloud software program corporations between 2018 and 2020, with 400 respondents this yr. 
  • These corporations responded rapidly to the coronavirus pandemic and their software program grew to become a necessity for a lot of clients, permitting them to develop quicker than the NASDAQ and S&P 500 general. 
  • Corporations with a product-led technique, which depends on the product itself as the first option to drive buyer development, have been particularly profitable, the report says.
  • Go to Enterprise Insider’s homepage for extra tales.

Cloud-based software program corporations have largely shook off the results off the coronavirus pandemic, in keeping with a brand new report from VC agency OpenView Enterprise Companions, which collected information from over 1,200 enterprise cloud software program corporations between 2018 and 2020, with 400 respondents this yr. 

“Information from our 2020 survey answered the burning query on everybody’s thoughts: ‘What was the
impression of COVID on enterprise software program?'” the report reads. “The reply: enterprise software program is



One in 5 firm respondents in 2020 mentioned that their anticipated price range noticed no impression, or perhaps a constructive impression, from the pandemic, whereas one other one in 5 noticed a unfavorable impression of lower than 10%, the report mentioned.

Individually, public cloud-based software program corporations have additionally rallied again from a 50% plunge in March, and grown quicker than the NASDAQ and S&P 500 general. 

How have been these enterprise software program corporations in a position to take action effectively? 

First off, these software program corporations moved rapidly in response to the downturn, in keeping with OpenView VP of development, Kyle Poyar, by shifting their advertising methods for brand spanking new use instances and clients.

What’s extra, cloud-based software program has turn out to be a necessity for patrons as they transfer their companies on-line. In consequence, these corporations have been rather more sturdy than anticipated, Poyar says. And whereas many corporations had layoffs early on within the pandemic, enterprise software program corporations are actually ramping up hiring, making the job market extra promising, Poyar says. 

“If you’re desirous about it from a purchaser perspective, they understand that it is costlier to do with out their software program, each within the brief time period than long run,” Poyar instructed Enterprise Insider. “Software program helps make staff members extra productive … It might be very brief sighted for a buyer to have a look at a recession and say, let’s reduce software program.”

A product-led development technique led to positive aspects

Corporations with a product-led development technique grew even quicker than enterprise software program corporations general, the report says.

A product led development technique signifies that an organization depends on the product itself as the first option to drive buyer development. Corporations on this class will use ways like providing free trials and making it straightforward for corporations to purchase the software program straight, as a substitute of getting to depend on salespeople. 

Some frequent examples of corporations like this embody Slack, Dropbox, Atlassian, and Zoom. Snowflake and Asana, which each went public this yr, additionally use that mannequin.

Customers now have extra time throughout the pandemic to find new software program and produce these instruments to their corporations, in keeping with Poyar: 

“I feel with the pandemic, we’re seeing a shift to distant work impulsively empower these particular person customers to be much more proactive,” he mentioned. 

Learn extra: Tech corporations say they’re utilizing all the things from Slack and Zoom to Discord and Jitsi to remain linked within the pandemic, exhibiting the altering state of cloud software program

Corporations that take this technique usually develop slowly within the early days, however after reaching $10 million in annual recurring income, these corporations are capable of scale quicker, the research mentioned.

“Product led development corporations are capable of develop quicker and extra effectively,” Poyar mentioned, “As a result of they’re taking issues that may be accomplished in a handbook intensive means and placing that into the product.”

Acquired a tip? Contact this reporter by way of e-mail at, Sign at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by e-mail solely, please.) Different kinds of safe messaging accessible upon request.