Where the Cloud is Headed at The Cloud 100 2020

Hello, everyone. Thank you so much for joining us for the fifth annual Cloud 100. My name is Matt Garrett, managing partner of Salesforce Ventures, and we're so excited to have you join us today virtually to celebrate the 2020 Cloud 100. Thank you for being here today.

And I'm Elliot Robinson, partner at Bessemer Venture Partners. Bessemer and Salesforce Ventures have two of the largest cloud portfolios in the entire VC industry. And for the fifth year in a row, we're excited to partner with our friends at Forbes, a leader in technology and venture capital journalism. Together, we celebrate the industry's success and recognize the leaders who are shaping the cloud first world we're living in today.

The cloud has really enabled democratization.

You know, I spent incredible amounts of time thinking about this crossing the chasm, you know, problem.

I can't imagine trying to lead an.

Organization through the amount of constant chaos that we're going through right now.

I love the pressure of it, how.

I handle a certain situation, a certain.

Decision may influence whether we win or lose. You have peaks and you have valleys.

And there is no rule in life.

That says that every valley must be.

Followed by a peak. And you learn to be able to be nimble in the pivot.

All of a sudden you realize you're.

Not going to go to New York.

You'Re not going to ring the bell.

There's a lot of advantages to being public. You know, it doesn't matter how good your product is, you need to have.

An organization to match it.

That's when you go from customer success.

Driving renewal to customer success accelerating expansion.

You're seen as a trusted advisor where.

You'Re helping them do their job better. It feels like the current wave of rising entrepreneurs are a bit different. We have incredible opportunity to deliver some change in the world.

I don't think we talk enough about the impact of the developed platforms that we're all building.

Whatever stage I get to, I'm not going to be successful unless I'm bringing other people with me. You are going to experience all kinds of issues. I think God will speak true to your company's value.

One of the things I am most.

Focused on is delivering value to customers. Tell them what you're going to do.

Do it, and show them that you did it. Welcome to Cloud one. In just a few moments, Forbes will reveal the 2020 Cloud 100 list, the best of the best in Cloud, and will be joined by forward thinking leaders and marquee cloud CEOs such as Eric Yuan of Zoom, Frank Slootman, of Snowflake and Jen Tejada of Pagerduty alongside All Star athletes Stephen Curry and Baron Davis for some really amazing conversations. A lot has happened since we last celebrated the Cloud 100. We are in an unprecedented time. In the midst of several crises at once a health crisis, an economic crisis and a crisis of racial injustice, organizations around the world have been forced to reimagine their businesses and how they operate and succeed. Today in the new normal transitions that we thought would take decades are happening right now faster than ever before. This is a very powerful moment for technology to be a force for good, and we've seen Cloud 100 companies in the Cloud 100 community help to usher in this new phase of innovation and growth. For example, when nearly the entire restaurant and hospitality industry had to shut down due to shelter in place orders, Toast built new solutions to manage online ordering, contactless delivery and other solutions to help during these uncertain times. Encino's SBA Lending solution helped dozens of banks efficiently provide financing to thousands of small and mid sized businesses through the Paycheck Protection Program. And how can you not mention Zoom? Zoom has demonstrated the true power of the cloud by facilitating remote work, virtual schooling and government organizing, and even helped us all during some of life's most precious and sacred moments. Whether that's a birthday celebration, funerals, or even virtual weddings, it's clear that we are truly living in a Cloud first world. Just like we've seen in prior years, Companies from the Cloud100 continue to achieve fantastic success in both large acquisitions and incredibly successful IPOs, including Encino's 2.8 billion IPO, Plaid's 5.3 billion sale to Visa, and Salesforce's strategic acquisition of Velocity for over a billion dollars. And of course, a congrats to Snowflake, our first graduate from the 2020 list. Congratulations to all of these Cloud 100 graduates.

And speaking of the publicly traded cloud companies, we are lucky to have the very CEOs who built this market and grew it to what it is today. Serving as our Cloud 100 judges, they help us determine who made this year's list. We want to give a special shout out and a big thank you to the CEOs and cloud giants who have given their time and support to participate as our Cloud 1002020 judges.

And of course, we want to recognize the generosity and support of our event partners for helping us bring these amazing speakers to you live at home today. So on behalf of Salesforce Ventures, Forbes and Bessemer Venture Partners, I'd like to give a big thanks to our sponsors and we pass it over to my friend Byron Dieter, partner at Bessemer Venture Partners, to give us a state of the cloud industry today. Take it away, Byron.

So before we discuss where the cloud industry's headed, let's first appreciate this journey we've all been on. Just 10 years ago, the entire market capitalization of the public cloud industry totaled just under 40 billion. Five years later, that scaled up 6x but still totaled just over 200 billion. Fast forward to the start of this year and the public cloud market hit a milestone that we'd predicted and all been waiting for. On February 5, 2020, we surpassed the 1 trillion dollar market capitalization level for the entire cloud industry. This, mind you, is on top of the cloud businesses sitting within the hybrid vendors like Microsoft, Google and Amazon as well. But little did we know what was just around the corner. Just a few days after hitting that trillion dollar milestone, COVID 19 tore through global communities and economies in March. We saw the major industries each drop more than 30% over the course of just three weeks, and the BVP NASDAQ Emerging Cloud Index tumbled along with it. But then some powerful things in technology started to happen. As the world was forced to leave their offices and stores and schools, they turned to cloud technologies. Solutions like Zoom have given us the connectivity and the ability to communicate with our colleagues, friends and family. But the same needs existed in the physical world with products. As storefronts were forced to close all over the globe, owners suddenly opened online storefronts to survive. In one month alone between mid March and mid April, hundreds of thousands of business owners turned to Shopify to open their first online stores. There are now more than 1 million Shopify stores today, and the usage continues to grow as business owners around the world go global. Businesses also found themselves urgently needing to move global call centers to work from home formats, and healthcare providers suddenly needed to accelerate their telehealth operations. Providers like Epic, zocdot and Doximity stood up HIPAA compliant virtual appointments powered by Twilio Video in a matter of weeks. And although the global health crisis remains, cloud companies like these and all of you are working harder than ever to keep the economy moving to get through this. And this is reflected in the cloud growth and adoption and financials. Companies like Zoom and Twilio and Shopify have grown significantly in the last months in response to this demand. And in aggregate, public cloud markets have pulled away from all the major indices and the Bessemer BVP NASDAQ Emerging Cloud Index powered well past a trillion and a half dollars this summer. But you know that the compounding power of cloud has been building for 20 years and this is now the most powerful force in all of technology. We know where the industry is headed. Cloud is the dark blue on this chart and you see it gaining pace as a percentage of all software. Cloud will become a majority of all software globally within the next few years and the vast majority of all software over 75% within this decade. Today we focus on the most selective slice of these private cloud companies, the 100 world leading industry defining private cloud companies of the cloud 100. So now my partner El is going to give you some more perspective on what it means to make the Cloud 100 list.

Today's event is not just a recognition of where the industry is headed, but a celebration of the new guard of cloud industry leaders and what they've accomplished thus far. We'd like to take a moment to highlight why it's such a significant achievement for any company to make the cloud 100. Let's dive in. Private cloud valuations are getting bigger and bigger as the market's appetite for cloud companies continues to grow. Over the past five years, the average Cloud 100 valuation has grown by a tremendous 2.5x from 1 billion in 2016 to 2.7 billion in 2020. In addition, the number of unicorns has increased each year. There were 36 unicorns on the Cloud 100 lists in 2016, growing to 60 by 2019. And this year alone we have 87 companies worth more than $1 billion that made the Cloud 100 list. In total, Cloud 100 companies have created an astonishing $450 billion worth of MA and public market cap value. Now that the IPO window has reopened, we expect to see some major cloud IPOs take place before the end of the year, as we saw recently within Cino, Snowflake and many other Cloud 100 honorees. Lastly, of note, Cloud 100 honorees span 12 different subsectors from vertical software, enterprise automation, data infrastructure, security, and many more. Interestingly, however, the number of developer platforms, along with collaboration and productivity solutions saw a 50% increase in representation year over year.

And let me end our State of the Cloud update with two final predictions. Given the accelerated growth of the cloud industry, we expect by the end of next year that we together will be celebrating the public cloud markets hitting the $2 trillion market cap mark. With that in mind, we we predict that for next year's Cloud 100 list, it will likely take a $1 billion valuation just to join the Cloud 100 ranks. So for all of you ambitious Cloud CEOs out there, you can consider that your target. And we look forward to welcoming you in these ranks in the future years.

We also want to say a big congratulations from all of us to all.

Of our Cloud founders and CEOs who.

Made the 2020 list, congratulations on all of your success. Now onto what we've all been waiting for. 2000-20s- Cloud 150.