cax estimation - crowdanalytix · 2019. 8. 23. · cax estimation estimate market size for cloud...

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CAX ESTIMATION Estimate market size for cloud based customer service software providers like Freshdesk, Zendesk etc. in the US

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Content

SectionPage

Number

Market Size, Vendor share, List of target companies

Market Size 4

Vendor Share 5-6

List of target companies 7

Facts and Assumptions

Facts 9

Assumptions 10

Estimations 11-15

Supporting facts/figures and rationales 16-19

References 20

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Market size, Vendors and list of target

companies

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Dollar value of the SaaS Helpdesk Market size

for the target market in the US in 2015

985 Million USD

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Market share of top help desk software

vendors in US

Refer slide 14 for detailed calculations

By number of customers in the US

By number of active users in the US

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How top vendors [by number of customers] are

positioned in the market

High

Low

HighLow

X axis: Estimated number of customers in USX axis: Estimated number of ‘active’ users in US

Size of bubble: Usage ratio [explained on slide 14]

Focus on small-mid sized customers

Focus on mid-large sized customers

Focus on customer retention

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List of 10 companies that client should target

Company name Company size Stakeholder within the target company to be targeted

Ixia

Turnover :455 mn USDEmployee strength :1001-5000

Professional services and Education services department

Liquidity services

Turnover :496 mn USDEmployee strength : 1001-5000

Surplus asset management and other services division and the procurement & customer support wing

Shutterfly Inc.


Division handling the technology for photo sharing

IPG Photonics


Applications divisions of the company and the procurement & customer support division

Orbitz Worldwide

Turnover : USD 847 mnEmployee strength : 1001-5000

Technology Procurement division & customer support wing handling the ticket booking

Simon and Schuster


Division handling the Business portal of the firm and other services like video streaming and the division looking after the procurement and technology wing related to customer support, purchase guidance

Gilt.com


Division handling the online payment transactions and also the one handling the website maintenance and upgradation

Athenahealth.com

Turnover :451 mn USDEmployee strength :1001-5000

Division handling the electronic/online health management systems technology and the online payment division

Drugstore.com

Turnover : Above USD 450 mnEmployee strength : 501-1000

Division handling the customer care and online transactions

Fortinet


Cloud management , antivirus and other service support division

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Facts and assumptions

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Facts

FACT 1

FACT 2

FACT 3

FACT 4

SaaS Market was valued at USD 14.5bn globally in 2012 and is expected to rise to USD 33 bn by 2015

SaaS market is expected to be worth USD 133bn by 2020

USA accounts for 60% of total SaaS market and North American SaaS revenues were around USD 9.1bn in 2012 (with USA accounting for maximum of those)

SaaS market worldwide is expected to grow at a CAGR of 32% globally and that in North America is expected to grow at a CAGR of 25%

FACT 5

Customer support market for SaaS based CRM is forecasted to be worth USD 4.6 bn in 2013 and projected to grow at a CAGR of 7.8%

FACT 6

The target industry accounts for approximately 13% of the US GDP (analysis in slide no. 14)

FACT 7

As per Gartner, the average IT spends by industries is 3.3% of the revenue and 12% of total IT spends is on SaaS(as per BCG)

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Assumptions

ASSUMPTION 1

ASSUMPTION 2

The SaaS compounded annual growth rate for US is same as that of North America

The growth rate , globally and for North America (hence for US), is going to remain as it is by assuming no major technological disruption or macroeconomic changes

ASSUMPTION 3

The market share for the top helpdesk vendors is calculated by considering the no. of users & customers, revenue and Google trends statistics. Also the figures have been triangulated by considering the top 20 vendors

ASSUMPTION 4

The CAGR for USA for SaaS based helpdesk market is same as that for total SaaS market (i.e. 25%)

ASSUMPTION 5

The CAGR for SaaS based CRM customer support is the same as that for total CRM customer support

ASSUMPTION 5

The IT spends for US are same as those globally & spends of SaaS based CRM customer support to be in the same ratio with total SaaS spends as the ratio of the market sizes

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Estimations

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Estimation: US SaaS Market Size

Analysis from Pierre Audoin Consultants (PAC): US accounts for 60% of global SaaS sales in 2012

Hence, by correlating the analyses of PAC & Gartner, the market size for SaaS for US in 2012 can be considered USD 8.7bn (which is 96% of total market size of North America) and growth rate 25%

Thus, market size for SaaS in US for 2015 = USD 8.7bn *(1+0.25)^3

= USD 13.6bn [Projected SaaS market size in US by 2015]

=60% of Global SaaS market = 60% of USD 14.5 bn = USD 8.7 bn

Analysis from Parallels Global SMB Cloud Insights: North America Market Size CAGR : 25%

Analysis from Parallels Global SMB Cloud Insights: Global Market Size 2012 : USD 14.5bn

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Estimation: US SaaS Customer service/Helpdesk

market size

Globally, Share of customer service in SaaS based CRM in 2013 : 4.6 bn USD

CAGR of SaaS industry in North America [source: Analysis from Parallels Global SMB Cloud Insights] = CAGR : 25%

SaaS based CRM customer support size for USA in 2015 =1.32 bn USD

Share of USA in Overall North America’s SaaS market : 96%

North America’s share in SaaS based CRM Customer support in 2013 : 52.9%

As per Garner, 40% of CRM software are SaaS based

Global Market size for SaaS base customer service and support = 40% of 4.6bn USD = 1.67bn USD

North America’s Market size for SaaS base customer service and support = 52.9% of 1.67 bn USD = 880 mn USD

US Market size for SaaS base customer service and support

= 96% of 880 mn USD = 845 mn USD

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Estimation: What percent of Overall SaaS

market in US is SaaS based Customer service

product?

US market size for SaaS products : 13.6 billion USD [Slide12]

US market size for SaaS-based Customer support products : 1.32 billion USD [Slide13]

% of SaaS-based customer support products OF overall market size for SaaS products

= 1.32 / 13.6 = 9.7%

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Estimation: US SaaS Customer service/Helpdesk

market size for Technology, Travel, eCommerce

and Publishing industries

Target MarketIndustry

revenues in USD bn

Technology & Tech. services 1541

Travel 303

Publishing 20.75

E-commerce 343

Total Revenue 2207.75

Industry revenues of

Target verticals

(Note :The technology and technology service section comprises of the information technology, medical technology and environmental technology)

According to Gartner , cross industry average spends on IT is 3.3% of the industry revenue [as per 2013]

IT spend for target verticals = 3.3% of 2207.75 bn USD = 73 bn USD

According to BCG, SaaS happens to be 12% of the total IT spends

Market size for SaaS products for target verticals = 12% of 73 bn USD = 8.74 bn USD [as per 2013]

Market size of SaaS-based customer support products for target market = 9.7%

[slide 14] of 8.74 bn USD = 848 mn USD [as on 2013]

Projected growth of SaaS based CRM globally = 7.8%

Assuming US SaaS CRM market grows at 7.8% as well

Market size of SaaS-based customer support products for target market by

2015 = 985 million USD

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Supporting facts/figures and rationales

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Estimation steps for ‘Estimation of top Customer

service/Help desk SaaS software vendors’ in the US

Share of the top vendors in the US helpdesk market was found out using the following methodology :

1. The revenue of the top helpdesk companies was found out for 2012. The revenues for almost all companies is for those units of the companies registered in the US.

2. To get an idea of the company’s presence in US, Google trends was used to get an idea of the visits on their respective sites by USA personnel vis-a-vis other those from other countries

3. The details of the users and customers of the companies were found out. This details are not USA specific.

4. All the 4 parameters listed above were rated with points, with the company scoring highest in any parameter getting highest points in the respective parameter. For those companies whose data wasn’t available(those companies happen to be low in almost all the parameters), 1 was awarded as a point for the respective parameter

5. The product of the points for parameters revenue and Google trends popularity in US was added to the product of the points for no. of users an no. of customers.

6. The total score for each company was benchmarked against other companies and the respective market share was calculated on the basis of that comparison.

The detailed analysis is on the next slide.

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Estimation steps for ‘Estimation of top Customer

service/Help desk SaaS software vendors’ in the US

VendorCustomers

[a]Users

[b]Usage

Ratio* [b/a]

% of website hits coming from US [alexa.com] [c]

Estimated' customers in USA [d= a*c]

Estimated' users in USA [b*c]

'Estimated' market share of

vendor [d/∑d]

Zendesk 40,000 200000 5 47.2% 18880 94400 13

Kayako 34,000 238000 7 36% 12240 85680 8

Uservoice 160000 45000 0 33.8% 54080 15210 36

Bomgar 8363 201363 24 33.4% 2793 67255 2

Freshdesk 20000 87500 4 25.4% 5080 22225 3

SysAid 11860 138000 12 20.3% 2408 28014 2

ManageEngine 85000 40000 0 19% 16150 7600 11

ClickDesk 100000 25000 0 23.5% 23500 5875 16

rightNow 2000 50000 25 72% 1440 36000 1

ConnectWise 5000 49000 10 66.2% 3310 32438 2

IssueTrak 1547 80114 52 81.4% 1259 65213 1

LiveHelpnow 21000 32000 2 29.8% 6258 9536 4

Parature 3000 45000 15 49.6% 1488 22320 1

Help Scout 2500 17000 7 45.7% 1143 7769 1

JitBit 1020 6000 6 11.4% 116 684 0

Mojo Helpdesk 600 5000 8 41% 246 2050 0

Source for [a],[b] : Capterra blog post

Source for [c] : Alexa.com

*Usage Ratio: Usage ratio tells number of ‘active’ IT administrators who are using the product per number of customers who have subscribed for the product till date. Low Usage ratio might signify• Low number of users per customer use the product• Customers who once subscribed to your product have switched to other products

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Rationale for ‘Finding top 10 potential customers’

for our Customer service/Help desk SaaS software

provider in the US

Sr.no. Company Category Reason for recommendation

1 Ixia Technology

Last 3 years growth of 30% and last year growth of 43% and major presence in cloud services . Despite their presence in the cloud, they may offload a part of their work to other players.

2 Liquidity services TechnologyLast 3 years growth of 23% and last year growth of 22%. Also, the firm is in online services related to wealth management and customer management requirement is imperative

3 Shutterfly Inc. TechnologyLast 3 years growth of 25% and last year growth of 25%. The firm engages in online photo sharing and hence they may require assistance with client interaction services

4 IPG Photonics TechnologyLast 3 years growth of 46% and last year growth of 17%. The company is into laserproducts and hence may require a structured channel for business interaction

5 Orbitz Worldwide Online travelGrowth rate of 8.7% in 2013. The travel portal management and services for customer interaction may be required by the firm

6 Simon & SchusterPublishing Company

Revenues from digital sales increased 35% from the previous year and represented 23% of total publishing revenues in 2012. The firm deals with digital services for which they may require analytics assistance and customer support. Customer support also required in general

7 Gilt.com E-commerceSales grew by 22% in 2012. An e-commerce site has heavy visits and other activities on the website. To handle it effectively they may require SaaS services

8 Athenahealth.com TechnologyLast 3 years growth of 31% and last year growth of 29%. Their online health management system may require resources for customer handling.

9 Drugstore.com E-commerce

Revenue growth expectations of 64% from 2010 to 2013 to USD 750mn. A fast growing e-commerce site that it is, it will require cloud assistance for handling huge customer requests.

10 Fortinet Technology

Last 3 years growth of 21% and last year growth of 29%. Transaction for its online products may require cloud assistance. Despite their presence in the cloud, they may offload a part of their work to other players.

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1. Cloud Hits the Enterprise, Deloitte Review, issue 11, 20122. https://www.pac-online.com/worldwide-saas-market-usa-leading-60-percent-market-share-press-release3. Profit from the cloud, Parallels Global SMB Cloud Insights, 20134. http://www.gartner.com/newsroom/id/19638155. http://www.capterra.com/help-desk-software/#infographic6. http://www.forbes.com/sites/tomiogeron/2013/06/05/americas-fastest-growing-tech-companies-2013/7. http://www.internetretailer.com/2011/02/23/drugstorecom-projects-750-million-revenue-20138. http://www.bloomberg.com/news/2013-07-31/gilt-groupe-ceo-seeks-to-prove-flash-sales-are-no-fad.html9. http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/58351-global-publishing-leaders-2013-simon-schuster.html10. http://investing.businessweek.com/research/stocks/earnings/earnings.asp?ticker=OWW 11. http://www.marketresearch.com/Business-Monitor-International-v304/United-States-Information-Technology-Q4-7192394/12. http://www.phocuswright.com/us-travel-market-tops-300b13. http://www.statista.com/topics/1177/book-market/14. http://www.emarketer.com/Article/Ecommerce-Sales-Topped-1-Trillion-First-Time-2012/100964915. www.hoovers.com16. Google trends : https://www.google.co.in/trends/18. LinkedIn : www.linkedin.com19. http://www.forbes.com/sites/louiscolumbus/2013/04/26/2013-crm-market-share-update-40-of-crm-systems-sold-are-saas-based/20. CRM Software Revenue Forecasts, Worldwide, 2009- 2016, Gartner (2012)21. Siemer & Assoiciates, SaaS Report, Summer 2013

References

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cax estimation - crowdanalytix · 2019. 8. 23. · cax estimation estimate market size for cloud...

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