COVID-19 forced businesses and consumers online, whether they were prepared for it or not.
Many SaaS solutions continued to do well during this unprecedented year and those with easy-to-adopt products essential for working from home thrived.
Bigwig SaaS providers like Microsoft and Salesforce continued to hit major milestones, but lesser-known businesses with strong foundations were also ready to reap the rewards of a virtual world.
Here are 10 breakthrough SaaS subscription businesses that saw big success in 2020.
Key growth metric: Total revenue grew 33% to $1.6B in fiscal year 2020, from $1.2B in fiscal year 2019
The SaaS business able to boast operations on two planets, Atlassian’s suite of collaboration and productivity software serves over 180,000 customers, and it hasn’t slowed down in 2020.
Referencing FY 2021 first quarter, co-founder and co-CEO Scott Farquhar said:
We also added more than 8,600 net new customers during the quarter, and now serve over 182,000 customers, including more than 160,000 using our cloud products, as we take the next step in our journey to transform Atlassian into a cloud-first global software leader.”
The business has deep roots pairing well-known software products (like flagship Jira) with prominent clients (such as Airbnb, Cisco, and eBay) providing agile project management tools to make work more efficient.
In 2020, Atlassian grew the next iteration of Jira (Jira 1.0 was initially launched in 2002 as Atlassian’s first product) with the Jira Service Management, the next gen of Jira Service Desk.
Named after the ancient Greek Titan Atlas, Atlassian continues to hustle to keep the sky from falling.
Key growth metric: Expected $70M ARR for 2020 (doubling from 2019)
Calendly founder and CEO Tope Awotona was dubbed as a “founder unicorn” by Fortune in November 2020. Awotona cites his own frustrations trying to schedule meetings as inspiration for launching his start-up in 2013.
The subscription-based scheduling software has successfully leveraged product-led growth (PLG) strategies, prioritizing the end-user to amass clients. The software’s basic subscription tier is free, which entices individuals to become acquainted with the product and then pay to scale their use for business.
Sometimes you gotta give the people what they want (and need), and the bosses will follow suit.
Key growth metric: Valuation tripled to reach $31.1B (from Sept. 2019 to Sept. 2020)
As more companies were forced to digitally transform their business models, the need for robust online security reigned. SaaS cloud monitoring business Datadog reported continuous 2020 quarterly growth, including a 52% growth of $100k+ ARR customers in its latest earnings report.
“The pandemic has driven organizations globally and across industries to prioritize their digital operations like never before, further strengthening the cloud’s position as the IT architecture of choice,” said co-founder and CEO Olivier Pomel.
In September 2020, the cloud service security platform announced a strategic partnership with Microsoft Azure, becoming the go-to monitoring and security service within the console.
Key growth metric: Valuation doubled to $26.88B (from Oct. 2019 to Oct. 2020) and has since hit a $30B valuation
With customers forced online and employees mandated to work from home, user authentication software played a vital role for businesses to maintain operations and ensure a smooth and trustworthy experience online.
Okta proved itself as a SaaS leader for identity and access management, with significant growth in subscription sales and a projected 2021 annual revenue growth of 40% year over year.
We are seeing the importance of a modern identity platform like the Okta Identity Cloud grow as businesses around the world accelerate their adoption of cloud-based applications and re-imagine their digital customer experiences,” said co-founder and CEO Todd McKinnon.
Key growth metric: Valuation increased 245% to $124.02B (from September 2019 to September 2020)
Shopify reaped the rewards of online businesses and saw tremendous growth as the premier SaaS e-commerce provider. In its latest report, total revenue for Q3 was $767.4 million, a 96% increase from 2019 Q3. The revenue from subscription solutions was $245.3 million, up 48% year over year, with more and more merchants selling online.
Shopify’s tremendous third-quarter results reflect the resilience and entrepreneurial spirit of our merchants,” said CFO Amy Shapero. “More entrepreneurs are signing on to Shopify so they can quickly and easily put their ideas into action.”
Key growth metric: Valuation surpassed $100B in 2020, and nearly doubled from Sept. 2019 to Sept. 2020
Making noise in cloud software is ServiceNow, a competitive option for digital workflow tech for enterprises.
Operationalizing workflows digitally and using automation software enables businesses to better assess their data and efficiently track processes and projects. This is more important than ever with so many teams working remotely in 2020.
With a goal of $10 billion in revenue, ServiceNow has made impressive 2020 growth strides. The company reports $1.09 million in subscription for Q3 2020, representing 31% year over year. In the same quarter, it closed 41 transactions over $1 million in net new annual contract value (ACV).
In a challenging pandemic environment, Q3 was a fantastic quarter for ServiceNow,” said CFO Gina Mastantuono. “I’m very excited about the traction we are seeing in our journey towards becoming a $10 billion revenue company and the defining enterprise software company of the 21st century.”
Fun fact: In October 2020, the company became the official workflow partner of the NBA and WNBA.
Key growth metric: 111% revenue growth over a 3-year period, as listed on the Inc. 5000 2020 list
While you might expect hiring freezes to be the norm as the pandemic took an enormous toll on the economy, JazzHR has been busy.
The hiring software company saw an “explosion” in jobs requiring logistical support in the fields of transport, healthcare, and technology, according to CEO Pete Lamson.
In an interview with Nathan Latka, Lamson said:
I think it depends on where you’re looking. In fact, we have had the most jobs posted, the most new jobs posted, by JazzHR’s customers in the history of our company this past month in July.”
In addition to being on the Inc. 5000 list for fastest-growing private companies for the fourth year in a row, the recruiting software for small and medium-sized businesses was named “Overall Recruiting Solution of the Year” in the 2020 RemoteTech Breakthrough Awards.
Key growth metric: Valuation of $5.5B after going public in September 2020. Customers spending $5,000+ on an annualized basis grew to 7,933, up 65% year over year and customers spending $50,000+ on an annualized basis grew to 283, up 160% year over year, as reported in fiscal year 2021 Q2
Asana, the project management software business founded in 2009 by Facebook co-founder Dustin Moskovitz and Justin Rosenstein (previously of Google and Facebook), went public in September 2020 with a direct listing on the New York Stock Exchange. Its valuation reached $5.5 billion after the listing.
All these companies are moving to remote work for the first time, getting that clarity has become an ever more important business imperative. We’re well matched to the moment,” co-founder and CEO Moskovitz told Reuters in a telephone interview.
Asana’s growth can be attributed to higher-priced subscription plans and revenue streams for existing customers.
Key growth metric: 1,198% revenue growth from 2016 to 2019, as highlighted on Deloitte’s 2020 Technology Fast 500 list.
Workato’s “hire-to-retire” automation process sets the SaaS business apart as a solution for effective onboarding for workplaces.
Workato has really been embraced by PeopleOps teams because the hire-to-retire process spans so many apps, systems, and departments,” said CEO Vijay Tella. “Of course, automating this process improves the workflows of the PeopleOps team as they hire new people and retire others, but more importantly, it also creates a world-class employee experience.”
In addition to being named as one of the 2020 Technology Fast 500 companies, Workato won the “Employee Onboarding Solution of the Year” in the 2020 Remote Tech Breakthrough Awards.
Key growth metric: 4X growth for expected total revenue for 2021 fiscal (between $2.575B and $2.580B compared to 2020 fiscal at $622.7M—Zoom financial year runs one year ahead)
2020 was the year a SaaS business name became a verb. Rising to video conferencing kingpin status, Zoom dominated headlines this year as the go-to SaaS virtual meeting and connection tool during COVID-19.
With record-breaking quarters throughout the year, the business reported a third quarter total revenue of $777.2 million—more than all four quarters of its previous fiscal year combined.
“Everything about our platform was built from the ground up to focus on video first,” Zoom CFO Kelly Steckelberg told CNBC during a television interview in April, revealing a secret to the company’s pandemic success early on.
I think the ease of use, the reliability, and the focus on delivering happiness to our customers is really what has made Zoom stand out.”
She cites the simplicity of the platform as a key differentiator from other products on the market.
As a vaccine becomes available, and video conferencing becomes an option rather than a forced need, it will be interesting to watch how Zoom adapts its product line to remain competitive.
SaaS subscription businesses vital to digital transformation
As businesses race to level up when it comes to technical agility and digital transformation, SaaS subscription businesses and the products they offer are becoming indispensable to success. As IT spending continues to shift to the cloud, it's driving up the valuation of promising businesses in the space—even amidst a global pandemic.
According to forecasts by Gartner Inc., global end-user spending on public cloud services is set to grow by more than 18% in 2021 to nearly $304 billion.
SaaS alone is forecasted to make up more than 38% of that total at $117.7 billion.
Sid Nag, research VP at Gartner said:
The pandemic validated cloud’s value proposition. The ability to use on-demand, scalable cloud models to achieve cost efficiency and business continuity is providing the impetus for organizations to rapidly accelerate their digital business transformation plans. The increased use of public cloud services has reinforced cloud adoption to be the ‘new normal,’ now more than ever.”