Bye Bye Recession - Led by Cloud Computing, Software is Roaring Back

As readers of this blog know, hundreds of leading software, SaaS and cloud computing companies are happily and profitably using Intacct's cloud-based financial management and accounting applications.

In the fourth quarter of 2009, we started to notice our Software industry customers provisioning more users in large numbers and subscribing to more modules too - which I took to mean they were coming out of the recession. This trend only accelerated in the first quarter of 2010 - leading to Intacct putting together record quarters for both Q4 and Q1, dramatically exceeding our plan.

Around the first of the year I was talking about this trend with MR Rangaswami, the CEO of Sandhill group, who is an old friend from past lives at Oracle. We thought it would be interesting to put together a formal research project to understand whether the resurgence Intacct has seen in its software customers is more broadly true in the Software industry as a whole.

This led to a new piece of primary research that Sandhill will release next week based on surveys and interviews with more than 100 Software CEO's and CFOs. The punchline is that unlike many industries that are still reeling from the recession, the software industry, led by the adoption of cloud computing, is roaring back. Across the board, the software execs that Sandhill interviewed are optimistic about the industry as a whole and downright enthusiastic about the prospects for their own firms.

The vast majority of the more than 100 software CEOs and CFOs interviewed indicated their company’s business has or will soon return to pre-recession levels, are ramping up hiring and are planning for significant growth in 2010. This is great news for the California economy.

The adoption of cloud computing / Software as a Service is clearly a major growth driver, and the execs are seeing a rapid shift to subscription-based business models. What was also interesting to me is the primary metrics the execs are using to measure their business have also radically shifted - to focus much more on managing recurring revenue, customer acquisition and churn.

Sandhill is presenting a webcast with the full results on Thursday, April 29, at 11:00am PT. MR will go through the survey highlights and then moderate a panel of CEOs and CFOs from Adaptive Planning, BigMachines, Intacct and Zuora, who will react to the results and talk about what they are seeing in their own businesses.

It's not often you get to review CEO and CFO forecasts from more than 100 leading software companies plus get to ask business planning questions live with four of the leaders - so I encourage you to register for the webcast. Everyone who attends will also get a copy of the rather hefty white paper detailing the findings.

If you are a software, SaaS or cloud computing exec, I expect this be well worth be an hour of your time. Register here - the link will take you to a webex page where you can register for the event.