How SaaS performed in ’08

The Great Recession lasted from Q4 2007 to Q2 2009 and was severe: unemployment increased from 5% to 10% in October 2009 and American households lost an estimated $16 trillion in net worth while. A quarter of households lost at least 75% of their net worth and half lost at least 25%.

We took a look at the data from 21 publicly traded software companies during the recession to see how SaaS performed during this period. The data is below.




YOY Growth fell to 15% on median. During the 6 quarters of the recession, year over year growth on median fell to 15%, but it is remarkable to see these companies still grew. Only 6 companies showed at least one quarter of YOY negative growth. Calidus Cloud performed the worst, but their story was about transitioning from a services & license business model to subscription. Additionally, they were doing shorter and less expensive on-demand implementations, which they knew would shrink service revenue. Adobe was also undergoing shifts in business model for some of their segments, specifically “platform revenue.” Setting aside these underperformers, it’s remarkable to see companies like LivePerson, LogMeIn, Salesforce, and Ultimate Software grow straight through the recession.

Operating margin improved. Operating margin actually improved as many SaaS companies showed an ability to cut costs. In the 4 quarters prior to the recession, median operating margin was 3%. During the recession, operating margin on median was 9%, and continued to improve after the recession. The recession actually forced the companies to improve their operations.

SaaS performed remarkably well during the Great Recession and may do so for any oncoming recession.

Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at and email directly at We invest in companies with run rate revenue of $3mm to $30mm, with year over year growth of 20% to 100%+ depending on revenue. We lead or follow in growth rounds and special situations like inside rounds, small rounds, rushed rounds, corralling investors with our term sheet, cap table clean up, and extensions. We can commit in 3 weeks and our check is $1mm to $4mm. Also visit for always up-to-date SaaS metrics.