We’re excited to update the SaaS Demand Index with data through June 2024.
For our new readers: the Demand Index is derived from high-intent Google Search volume data. Due to an ongoing, partial shift in Google’s methodology, this month’s sample consists of 92 companies (versus our usual 340). However, all graphs are pro forma on a historical basis (i.e. apples to apples).
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 +21% year-over-year and +1% month-over-month.
The YoY graph below compares the high-intent search trends to Gartner’s 2024 cloud spending forecast only to give context. In the footnotes, we note possible “apples versus oranges” dynamics when comparing the SaaS Demand Index versus Gartner.**
Tying this newsletter edition together and factoring in sales cycles, the weak 2H 2023 Demand Index trends align with the poor revenue attainment / forecast misses in the 1H 2024 Pavilion Pulse report.
The new YoY graph above compares the high-intent search trends to Gartner’s 2024 cloud spending forecast only to give context. In the footnotes, we note possible “apples versus oranges” dynamics when comparing the SaaS Demand Index versus Gartner.**
*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.
**Demand Index vs Gartner SaaS Revenue possible “apples versus oranges” dynamics:
- potential buying journey shifts away from Google search and now starting on review platforms (like G2) and – to a lesser extent in terms of measurable impact – community recommendations (like private executive Slack groups).
- a general trend for Google search volumes to plateau with scale. We’ve also observed this dynamic with retailers.
- most importantly, the SaaS Demand Index is a *forward indicator*, whereas Gartner’s market sizing and growth capture *realized revenue* → given sales cycles, “lagging” our SaaS Demand Index is the right way to examine correlation.