Renewed Optimism in Enterprise Tech: The Latest Enterprise Technology Pulse Survey

This year, with so many things being upended, disrupted, and redefined, cloud companies are answering the call for accelerated digital transformation.

Salesforce Ventures

October 19, 2020

For the full findings in an interactive Tableau dashboard, click here.

As the world began to experience the effects of COVID-19 earlier this year, we surveyed enterprise cloud tech CEOs in March and many were bracing for the worst. Thankfully, increased demand for digitization in the last two quarters has led to renewed optimism, as enterprise software is proving to be more resilient than initially forecasted.

Last month, during the same week of the successful IPOs of Snowflake and JFrog, Salesforce Ventures announced the fifth annual Forbes Cloud 100 list, which saw the average valuation of its ranks more than double since its inaugural list, from $1 billion in 2016 to $2.7 billion in 2020. Nine out of every ten companies on the list this year are worth more than $1 billion.

In this second edition of the survey, Salesforce Ventures surveyed the CEOs of 90+ enterprise technology companies to gauge their sentiments about their businesses, their customers, and the state of the markets. The survey was collated and administered by our portfolio company, SurveyMonkey. We asked CEOs about their go-to-market strategies, bookings, and churn, as well as their plans for hiring and remote work. The CEOs surveyed were from leading Salesforce Ventures portfolio companies and/or CEOs from companies recognized on the Cloud 100. You can see the full Tableau dashboard with findings here.

Our chief finding: While some sectors are still struggling and cutting spending, others are looking to technology to help them reposition and/or improve their businesses. Enterprise cloud companies are benefiting from rapid shifts toward online processes, including banking, transactions, and supply chain management, as well as distance learning and virtual communications.

We found three key takeaways worth highlighting:

#1 Digital transformation has momentum — and urgency

Despite a bleak outlook in March, when surveyed in September, nearly 90% of CEOs noted an acceleration in digital transformation and attributed it to the pandemic. About half of them believe the pandemic has created a tailwind for their business, and of those, half also believe that tailwind will fuel growth into 2021. About half of the CEOs surveyed believe their customers’ digital transformation budgets have increased. That said, not everyone is out of the woods: Of the 39% of companies experiencing a headwind, 12% believe it will have “a lot of negative impact” while the majority (76%) believe that it will have “a little negative impact” for 2021.

#2 Bookings and customer retention are stronger than expected

In all, Q2 was far better than many expected, with 64% of CEOs reporting they were at 76% or more of their plan, versus the 30% forecasting as such in March. Expectations for Q3 are trending positively, 87% of CEOs are forecasting at 76% or more of plan. Moreover, the majority of CEOs think they will see less than 5% increase in churn.

Nearly 60% of CEOs surveyed said they shifted their sales strategy as a result of COVID-19 — an improvement from our March survey when 84% expected to do so. In September, two-thirds of CEOs reported that they lowered their sales team quotas, compared to 30% in March. Three out of four say they will not be adjusting compensation for their sales reps. Of the 25% who stated that they will adjust compensation, 75% said they will implement those changes across the board (versus individual sales reps). Each CEO’s strategy of how to handle reps under quota varies widely.

Fundraising was another positive. One out of three CEOs said they raised their latest funding round within the last six months, during the pandemic — and of those, 38% completed the process with meeting new investors only virtually.

#3 CEOs are optimistic about their workforce

Signs of growth and optimism are aligning with hiring plans and views on remote work. When surveyed in March, 67% of cloud CEOs expected to implement a hiring freeze and/or layoffs, yet in September, fewer than 25% have done so or plan to in the near future. Nearly three out of four CEOs plan to increase hiring for sales positions. Of those, 41% say they will add more than 20% to their existing sales headcount.

Remote work has proven to be a much smoother transition than feared. Nine out of ten CEOs surveyed continue to be optimistic about working remotely: 87% plan to operate under a hybrid model with employees both remote and in physical offices. Only 13% operate as or plan to operate as fully remote. As a result, half of the CEOs surveyed say they expect to reduce office space.

The past seven months have brought a truly unique set of challenges. With so much changing day-to-day, it’s been difficult to make prudent strategic decisions and long-term plans. We hope you find this survey to be useful as you contextualize your own business, and we wish the best for you and your teams.

If you would like to drill down into more detail on our findings, we welcome you to view all the findings here. For the best experience, view the findings on a desktop. We plan to make this a biannual study, repeating some questions as a way to gauge evolving plans, as well as introducing new ones based on the business climate and relevant topics at the time.

If you have specific questions you’d like us to ask in our next survey, please email us here.

#1 Digital transformation has momentum — and urgency

#2 Bookings and customer retention are stronger than expected

#3 CEOs are optimistic about their workforce

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