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AcctTwo Blog

How Did the Recent Market Dip Affect SaaS Companies?

SaaS Companies Weathered the Market DipAfter years of rising fortunes and relative stability, the stock market went on a wild ride through the start of 2018. More than $5 trillion drained out of global equity markets over the first 10 days of February, and halfway through the Dow shed almost 1,600 points in one day – the largest single-day decline in history.

Now that the volatility has largely leveled off, investors and industry insiders are understandably eager to figure out exactly what this turbulence means for the future of markets. Looking at the stocks that plunged is important, but the stocks that made it through February relatively unscathed are just as instructive.

Prominent SaaS companies like Salesforce, Workday, and ServiceNow all experienced declines of less than 1 percent. ServiceNow only shed 92 cents during the market dip, which translates to 0.6 percent of its stock price. With only a few exceptions, mostly at the smaller end of the cloud ecosystem, SaaS companies went unscathed while the rest of the market went into a panic.

What SaaS Stability Means for Users

There are many factors, both known and unknown, that allowed SaaS companies to weather the market storm. But the primary takeaway for SaaS subscribers is that this business model is strong, and cloud-companies enjoy a level of stability that others in IT do not.

That matters for users because SaaS is designed to provide mission-critical solutions on an enterprise-wide scale at a manageable cost. Said another way, various SaaS solutions are essential to the companies that rely on them. If one of these solutions was to spiral downwards along with an out-of-control market, subscribers might worry about the stability of crucial applications, data, and operational resources.

However, that issue did not arise during the most recent market dip. And the fact that it didn't bodes well for the future. While Many other companies are now anxious about uncertainty and instability, the SaaS market, by contrast, has demonstrated that it has a strong foundation, ample investor confidence, and a prominent position in the future of IT.

Making the Move to a SaaS Platform

As companies search for enterprise software, they are increasingly choosing SaaS first. Recent market performance should only affirm the wisdom of this strategy, but it's important to realize that not all SaaS platforms are created equal.

Sage Intacct has become the leading financial management solution in the SaaS market by focusing on users first. Every feature and function has been engineered for the needs of accounting and finance professionals, whether they are on the front lines or sitting in the C-Suite. And since the solution is automatically updated four times a year, it’s constantly improving.

Now that the market has calmed down, decision makers can return their focus to long-term planning and strategic thinking. Explore how Sage Intacct fits into that focus by contacting AcctTwo.

Topics: SaaS Cloud Computing / SaaS