Delivering and selling software-as-a-service has required a whole new focus on business metrics for software companies. It’s all about tracking cash flow, detailed subscription and customer metrics, and understanding at what point the model becomes scalable and profitable.Benchmarking these key metrics against your closest peers is the best way to red-flag areas where you might be under-performing. Conversely, it identifies areas of excellence where you are excelling and should continue to fully support.
Purchase SaaS Benchmark Report NOWSaaS Benchmarking Report Contents
OPEXEngine has been tracking SaaS-specific metrics, in addition to overall financial and operational benchmarks for software companies, for four years. We’ve worked with CFOs from leading SaaS vendors to define key metrics that are comparable for different size SaaS companies. These include benchmarks such as:
- Contracted monthly recurring revenue for last month of year
- Change/Growth Rate in Contracted Monthly Recurring Revenue
- Net New Monthly Revenue During Last Month
- New Customers for the Year
- Customer Acquisition Costs
- Customer Acquisition Costs per New Customer
- Customer Maintenance Costs
- Customer Maintenance Costs per Active Customer
- Average Contract Value per Customer
- Average Term of a Customer Contract in Months
- Customer Renewal Rate During Year (As a % of Customers Up for Renewal)
- Dollar Renewal Rate During Year (As a % of Total $ Value Up for Renewal)
- Average number of months payment required from customers upfront
- Billing frequency: monthly, annual, or other
- Total hosting expense (As a % of Total Recognized Revenue)
- Number of datacenters
- Hosting expense per data center
Purchase SaaS Benchmark Report NOWAt T2 Systems, we migrated our customers to the SAAS business model in 2005. Since then, we struggled to find key benchmark data that we could use to determine the quality of the Company’s financial metrics. OPEX Engine easily filled that void for our team by providing us with key data points ranging from customer acquisition costs to revenue per employee. OPEX is one of our most important strategic planning tools.
Jim Zaloudek, CFO, T2 Systems, Inc.