Over the next 24 months, we believe that we will witness a profound migration of senior cloud talent from public and late-stage private SaaS companies to healthy early- to mid-stage companies that offer a more rewarding professional growth opportunity and higher financial return potential.
Here is why:
The party is over
And what a party it was! For well over a decade since the 2008/2009 Great Recession, the cloud market has known only one direction: up and to the right.
Almost without interruption, the market grew, public investors got the hang of SaaS economics, and IPOs became more frequent and more lucrative. That swelled private-market investment activity, valuations and the list of cloud unicorns. The pandemic-induced rush to digital transformation of business, paired with stimulus money and cheap capital, acted as a massive catalyst, causing conditions to become unsustainably frothy in 2020 and 2021.
But since late 2021, public cloud stocks have given up 50% of their combined market capitalization, and the IPO window has all but closed down. Private late-stage companies that took big rounds at high valuations face valuation resets, most of which are only beginning to materialize in their annual 409A FMV assessment cycles.
The Great Migration and the next 10-year cycle in cloud by Ram Iyer originally published on TechCrunch
