Opinion
How SaaS Startups Can Compete in a Bundled World
Software startups have thrived by targeting end users rather than centralized IT departments. Tighter budgets and enhanced scrutiny threaten that formula.
Tunguz is the founder of Theory Ventures.
The stock market has recovered somewhat after taking a battering last year. But this rebound masks how software buyers have shifted their purchasing priorities, slashing vendor revenue growth rates in the process. No longer do best-of-breed programs dominate; now it’s all about best-for-budget. Vendr, which tracks software spending, says net new purchases have fallen to 19% of sales this year, from 30% last year.
So what’s a startup to do? Where does opportunity lie for SaaS startups and the investors who choose to fund them—or not?