![]() Within the next three years, we expect the cloud will become the dominant delivery model for all software, as we embody a cloud-first world. These public market milestones point to a powerful trend underway - cloud’s acceleration is permanent and COVID-19 more than doubled the rate of digital transformation across different vertical industries, impacting people’s everyday lives. Simply put, cloud computing is increasingly consuming software, hardware, and services and is, therefore, the most exciting mega-trend in technology, making it one of the most compelling themes impacting global GDP over the coming years. In all of this fast-moving cloud activity, it’s important to note that there’s a changing of the guard among the top-performing basket of technology stocks. (Their purchase of Slack was also the second-largest enterprise software acquisition only after IBM's purchase of Red Hat.) Salesforce’s purchase of Slack for $27.7 billion receiving 33.2x revenue multiple was record-breaking in the M&A market. What was also unique in 2020 was the emergence of private equity buyers, as we saw first hand with Pipedrive and Gainsight. We can’t forget to mention how many cloud giants joined forces via M&A, including Twilio’s purchase of Segment, and other key strategic acquisitions including Vlocity, Workfront, and Kustomer. Snowflake’s banner IPO points to the fundamental ways in which the data stack for companies is undergoing a significant transformation as more companies migrate to the cloud. It also became the fifth-largest tech IPO ever after Facebook, Uber, and Snap, surpassing other 2020 blockbuster IPOs including Airbnb and DoorDash. ![]() Raising over $3 billion in its initial public offering, Snowflake became the largest software IPO in history, far surpassing VMware which had held the record since 2007. ![]() Also, more IPOs last year doubled in value during their opening days than any year since 1999. In the public markets more broadly, twice as many companies went public in 2020 than in 2019. This includes the high-flying IPO of Snowflake, as well as other major public offerings, including Qualtrics, C3, Asana, Sumo Logic, JFrog, BigCommerce, nCino, Agora, and more. Go to our newly launched Cloud Index to see where we stand today.ĭespite a tumultuous first half of the year, 2020 was marked by record-breaking activity in the IPO & M&A environment, especially for the cloud industry. At that time, we projected it would take another couple years to cross $2 trillion, however on February 5, 2021, we stood at an impressive $2.2 trillion. Together, these five public companies are collectively worth more than $1 trillion.Ĭoincidentally, exactly one year later on February 5, 2020, we celebrated crossing the $1 trillion milestone. In a year, the top five public cloud companies saw a total 1.7x (or 70%) increase in total market cap - Paypal, Adobe, Salesforce, Shopify and Zoom. As Zoom meetings, Zoom backgrounds, and even Zoom fatigue became ubiquitous of the New Normal, the business’ market capitalization grew over 4x to reflect that. And last but not least, Zoom replaced ServiceNow in the top five. Second, Shopify nearly tripled in market capitalization as small businesses sought to move their business online to continue engaging with their current customers and attract new ones. When we look at how the top five public cloud companies grew over the past year, there’s a clear story of how the pandemic drove the change.įirst, Paypal shifted from third place to the largest market capitalization, which was driven by the rise in e-commerce and the increase in digital payments including a QR code system for contactless payments in physical stores.
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