It is a great time to be a software-as-a-service company. The worldwide software market has an estimated value of more than $400 billion.
However, the cloud software market (SaaS/PaaS/IaaS) makes up only $48–$56 billion, meaning that “cloud-based software accounts for no more than 15 percent of the value of the total software market,” but this distribution is quickly changing, according to Altos Ventures.
Not only that, but the channels of customer acquisition have become more efficient due to innovations in freemium and free-trial models—plus more sophisticated pipeline-marketing efforts. Software startups are also much more capital-efficient today than ever before, causing startups to require less capital for growth…
