Why the Time For Cloud Technologies Is Now – ACCEL Report
October 22nd, 2020 (Updated 03/24/2021) | 8 min. read
By Duncan Hendy
Why the Time For Cloud Technologies Is Now – Accel Euroscape Report
According to American venture capital firm Accel’s recently published report, 2020 Accel Euroscape: Decacorn Unleashed, software has been “eating the world for 30 years now,” but the acceleration we have seen in the past decade puts us in a new software era that Accel calls “the rise of the giants”.
Accel has invested over $5B in more than 250 companies over the years and has increased its investments five-fold in the last five. Their report (written by Philippe Botteri, Varun Purandare and Candice du Freta) was published last week at the SaaStockEMEA and also unveiled the firm’s 2020 Accel Euroscape winners.
“It’s been a very special year in many ways for the Cloud ecosystem globally and in Europe.”
According to the report, in 2010, there were eight Cloud companies valued above $1 billion, with Microsoft, Oracle and IBM alone being valued at just over $550 billion. By 2020, there are 75 public Cloud companies (26 of which are above $10 billion) and eight software companies above a $100 billion market cap, representing $2.7 trillion of market value.
The Cloud market has tripled in the past five years to reach $100 billion and its momentum continues to build. According to Accel, we can expect Cloud to overtake on-premise software by 2025.
“The momentum of Cloud [..] seems unstoppable with around $1 trillion of value created in the past 12 months and the Cloud Index massively outperforming the Nasdaq.”
This ‘quiet revolution’ has taken the world by storm, disrupting traditional software markets everywhere.
Accel puts it momentum down to an increase in private investment rounds (from an average of $100 million in 2016-2017 to $330 million in 2019-2020), an increase in valuation multiples (currently 10 times higher than during 2008), and the acceleration of digital transformation.
While Digital transformation has been a trend with companies of all sizes recognizing the need for on-tap flexibility, functionality, and innovation for some time now, the recent radical transformation of the work-from-home paradigm has accelerated its pace dramatically (by at least two years, according to Accel).
Why Cloud-based Technologies Are Winning in 2020
We’ve seen the popularity of SaaS (software as a service) explode over the past few years for a multitude of reasons, all of which feed one key metric: excellent Time to Value (TtV).
Time to Value is the time it takes before you see the value of an action you’ve taken. It’s similar to return on investment (ROI), but rather than measuring the financial success of your investment, you’re measuring its efficacy.
So, it’s the time it takes before you start seeing the value that your software brings to your business once you’ve taken implementation time, any lack of features, complicated integrations, adoption rates and downtime into account. Because ‘cost’ is so much more than just the price tag.
SaaS Revolutionizes Time to Value
SaaS takes a fraction of the time an on-premise solution takes to implement, so you can be making those big changes to your processes and seeing them impact the bottom line much faster – something that will make you and your investors happy.
It’s also much cheaper to set up than an on-premise solution as it has a pay-as-you-go subscription model. So, there are no major upfront costs or annual contracts – just regular and predictable ongoing payments spread over time. Which makes finding the initial investment much easier and the commitment less daunting.
And as for ongoing costs, all maintenance, fixes and upgrades are included in your license and handled by the vendor, cutting operational and maintenance costs significantly. The software effectively manages itself so you can spend your time and resources on more profit-generating activities. Time is money, after all.
Of course, a major benefit of the Cloud is that all your applications are available at anytime from anywhere with an Internet connection, and via any device. Remote working is moving swiftly from the ‘nice-to-have’ to the ‘critical’ list as we head deeper into uncertain times.
And by having one central hub for all your data, processes and workflows, you can ensure one single source of truth, and that everyone is on the same version of the same page – no matter where they are logging in from. Besides which, the advances in automation technologies is expediting and refining processes, freeing up talent to work on tasks with more value input.
And you can’t beat Cloud flexibility. With Cloud software, you can effortlessly add licenses on the fly to meet demand or add features to fulfil a particular need, and then scale them back once no longer required. So, you’re only paying for what you use and only for the duration you use it.
Subscription also means you can do a proof-of-concept trial by simply firing up the necessary capacity for the duration of the project, and then shutting it down once complete. Or you can shop around before committing to any particular software – dipping your toe in to test the waters, without having to make a major time or financial commitment. And this makes the vendors work harder for your custom, too, so you can be sure they’ll be focused on delivering excellent customer experience and getting all the latest features to you in their next upgrade. Something that can be lacking in on-premise providers.
And what’s more, Cloud providers have embraced superior security standards and technologies into their security infrastructures that are often well beyond the affordability of most companies, making it safer to do business in the Cloud than on your own servers.
So that’s why SaaS is making waves right now and inviting enviable investment. Because in times like these, business agility is the name of the game. Business agility is a company’s ability to adapt to change in a fast and cost-effective way while maintaining its competitive advantage.
An agile business can ride any storm because it has the data, tools, and processes in place to respond innovatively, confidently, appropriately, and swiftly. Times like these require companies to be able to pivot their message, portfolio and processes to stay ahead of the game.
With their own agile/scrum architecture, methodology and culture in place, SaaS technologies are able to pass their agility along to their customers through software that is agile at its core.
‘Agility’ would be SaaS’s middle name were there room for another ‘a’.
2020 Accel Euroscape Winners Announced
Having shared the story of the exponential growth of Cloud, Botteri went on to announce the winners of the 2020 Accel Euroscape, Accel’s list of the top 100 Cloud companies started in Europe and Israel with revenues above $1 million and valued at less than $1 billion.
This year, the winners come from 34 cities in 21 countries, with $7.4 billion in funding raised between them. And we’re proud to share that Pricefx has been included!
Pricefx is a Cloud-native pricing solution that fully leverages the capabilities and opportunities of the Cloud and uses cutting-edge machine learning to help you weaponize your data and enable automatic and insight-driven pricing.
Implementation is 2-4 times faster than other pricing solutions and licensing is pay as you go. The solution integrates easily with your existing tools and scales to meet your fluctuating needs. Ongoing agile implementation cycles ensure you move faster towards your profit goals while saving you thousands of IT hours and downtime. The unified and customizable UI pricing tools simplify processes and improve team efficiency. And as an ISO-certified company, we keep your data absolutely safe.
Congratulations to all the winners! We’re proud to be leading the way in Cloud-based technologies in Europe with you.
Accel also announces the creation of the Accel Euroscape Public Index, the index of public Cloud companies born in Europe and Israel, currently composed of 10 companies with a combined value of close to $100 billion.
That gives us all something to aim for!
What’s Next in Cloud According to Accel?
At the end of their report, Accel shared five trends they see ahead for the Cloud ecosystem in Europe:
- Remote working – SaaS solutions that enable secure access from anywhere will be essential for companies heading forward into uncertain circumstances.
- Doctors online – doctors have been forced to embrace new technologies in recent months and we could be at the start of a major digital transformation in medicine.
- Hyper–automation – Low/no code platforms are enabling companies to automate their own processes. And with RPA automating data and intelligence layers, we can expect a whole new generation of Cloud services.
- Fintech going Cloud-ward – Modern API-first platforms enable Cloud companies to integrate payments and banking services and they expect a new generation of fintech infrastructure companies to emerge.
- Post-COVID Security – After the hacker paradise that was COVID, we will see enterprises moving to zero–trust architectures and more funding going into the category.
Accel warns, however, that the pandemic is different to previous crises in that there are as many opportunities for Cloud companies as risks.
“Navigating this crisis is not about cutting back: it’s about taking advantage of the opportunities while not leaning too far over your ski tips to avoid a catastrophic fall.”
It’s Getting Cloudy out There
There’s a reason that Cloud technologies are winning in 2020. Digital transformation should be the next goal of any company wanting to compete in a constantly changing, data-driven, customer-led, technologically savvy arena.
And SaaS technologies are the only way to go.