Managing the growth of a software business, whether selling traditional on-premises software or SaaS, is far more likely to be successful when management is metrics-driven and has good visibility into all the key performance indicators described in this post. With greater visibility and analysis of these metrics, companies are better able to make good decisions about efficient and productive resource investments resulting in strong revenue growth rates and high valuations. The metrics and data in this post are derived from research by me as a result of my years of experience working for several software and SaaS companies.
The Critical Metrics of a SaaS Growth Model
The most important metrics to track right from the start of a SaaS business fall into four primary categories:
- Revenue metrics
- Customer metrics
- Cost, Expense and Profitability metrics
The following is a presentation on SaaS key metrics for building high performance, valuable tech companies that I prepared as a part of the course requirements for the “Introduction to Cloud Computing” class that I recently took with Microsoft.
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