Cloud’s growth cycle isn’t behind us yet

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today, something a little different. Last week both Okta (2017 IPO) and Ping Identity (2019 IPO) reported earnings. Given that Okta and Ping are SaaS companies that sport competing product lines, the paired financial reports caught our attention. TechCrunch spoke with each after earnings. The picture that we got back from both companies was one of continued growth and increasing profitability.

This matters, as some cloud investors have thoughts about an eventual cloud slowdown. The most common argument that TechCrunch has heard is that as cloud and SaaS continue to eat at the current portion of enterprise software spend that they don’t already control, the pace at which they add market share will slow.

This doesn’t mean that SaaS and cloud products are going to go shrink; instead, the idea is that the pace of their expansion could slow, perhaps dramatically. End of the world? No. But a potentially notable change from the heady, recent days when SaaS and cloud were storming ahead.

Slower growth could limit the value of SaaS and cloud companies, which have long enjoyed rich valuations as investors coveted their recurring and regular revenues. This has in turn bolstered startup investors piling into enterprise-focused software companies. Changes to the market would impact not only the big shops, but perhaps smaller companies as well.

Let’s peek at Okta and Ping’s earnings briefly, and then read through notes from the companies about growth, customer acquisition costs, and more. Our goal is to get a handle on how two large, public SaaS players think about the world as they compete for growth and market share. What they tell us should help both you and I know what’s ahead for other SaaS players, large and small alike.