February 2024 SaaS Demand Index

Read our interactive PDF report:

We’re excited to update the SaaS Demand Index with data through February 2024.

For our new readers: the Demand Index is derived from high-intent (aka “okta pricing”) Google Search volume data for 339 companies, covering 350,000+ searches each month.

PDF slides here.

Reminder: this is a directional, free, and ever-evolving* analysis → always do your own due diligence.

Moreover, the data captured here is best characterized as top-of-funnel or dark funnel → factoring in sales cycle length, do NOT use this Demand Index as a predictor of near-term financial results and/or financial guidance.

Industry-Wide Data

High-intent search volumes were up +5% month-over-month and +17% year-over-year.

While noting an easy February 2023 “comp”, this +17% YoY reading is an acceleration that brings our TOFU proxy index closer to expected industry revenue growth rates for SaaS (Gartner at +19% industry-wide for 2024).

Trends By Product Category

Zooming out to recap almost three years of data on our cumulative growth since January 2021 slide:

This slide presents growth for the last month and last three months, respectively:

Callouts from recent trends:

Communications: The notably strong February interest spike was driven by MessageBird’s pricing announcement. A 90% pricing cut serves as a reminder that not all search trends captured here are favorable:

Above Average Performers: Consistent with prior months, the strong performers were Communications, Finance + ERP, HR + HCM, Industry Specific / Vertical, and Security

Security: Strong performers within the Security category included Crowdstrike, Wiz, Cyberark, Cloudflare, Sailpoint, OneTrust, Forcepoint, and Auth0.

All of the category drill-downs – like this Industry Specific example – are available in this slide PDF:

Other Trends

By customer mix, SMB has generally outperformed Enterprise recently:

Private companies have been outperforming publicly traded SaaS of late:

Cloud Cost Optimization Trend Update

The general trend toward cloud cost optimization abating (see recent Amazon, Microsoft, and Google earnings call commentary) reversed somewhat in February: cost containment searches were up +6% year over year and +6% month over month:

*In an effort to publish closest to month end, we are accessing the underlying API data “early” (relative to the typical SEO and PPC users that do not require such immediacy). Therefore data should be considered “provisional” (i.e. subject to revision by our data provider) and create volatility in the data presented in the 2 most recent months. For this month, Zoom was excluded due to nonsensical data via the API; the historical data presented, however, is also pro forma to exclude Zoom.

This report was first published on cloudratings.com.

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