In the span of two years, an up-and-coming ecommerce company went from a valuation of 2.5x revenue to 12x revenue, from a low nine-figure valuation to an acquisition price nearly ten times that, nearly $2B in fact. What decisions did the company make in that time to increase its valuation by almost a magnitude? The big one was switching from an enterprise license product into an SaaS-based cloud offering on Platform.sh.
Before their acquisition, the company had attempted to transition from its open-source, PHP-based platform to a software-as-a-service implementation. However, the new platform failed to gain market traction due to the constraints of its infrastructure management capabilities. It didn’t allow larger shops to customize it to the extent they required, and for smaller shops it was too complex. Small business owners were unable to easily configure, and development teams in larger companies were unable to enhance!
For those companies in the early stages of their SaaS journey, this case study offers an instructive overview of the many benefits of a cloud offering on Platform.sh.
Second time round, and seeking a better option for implementing a global SaaS offering, the company met with Platform.sh to discuss buy-versus-build options. We showed them how platform-as-a-service could offer them a managed hosting option that would give them immediate access to an advanced container management platform able to propel their new SaaS offer worldwide.
By partnering with Platform.sh, the company secured a problem-free cloud infrastructure to support their SaaS application at the right cost per client. The new Platform.sh cloud service proved immediately attractive to the company’s clients. It solved some large-scale hosting challenges for them, whilst also offering a huge step change across the entire ecommerce building experience.
As well as raising customer satisfaction, the SaaS vendor gained considerable internal business value from the PaaS, achieving:
The SaaS vendor also found that partnering with Platform.sh allowed them to solve several stubborn problems clients were wrestling with:
Eliminating the time, resources, and costs that would have been consumed by building/operating a complex cloud infrastructure freed up energy and funding for other equally critical aspects of the business model, such as improving the SaaS application architecture, accelerating the feature roadmap, and enhancing support to marketing and partner sales. Platform.sh offers our PaaS for SaaS bundled with expert services:
A few years after launch, more than 85% of this SaaS vendor’s new enterprise customers purchase the cloud offering. Tens of millions of dollars in incremental annual recurring revenue are derived from the new non-software-licence components of the cloud offer, including hosting compute, application support, embedded technologies like CDN, and code performance tools.
In the following weeks, Kieron Sambrook-Smith, chief commercial officer for Platform.sh, will continue to share our experiences and insight through a series of articles that offer lessons on how your organization can also maximize the potential of its business model by transitioning to a PaaS cloud infrastructure. Check back soon for the next article!
If you’d like to connect or open a conversation about your SaaS business model or the value of a PaaS cloud infrastructure on the rest of your business model, you can find me on LinkedIn or you can contact me directly: email@example.com.