Cloud software buyers are getting frugal, leading to slower growth at former highfliers

CNBC March 19, 2024
Jordan Novet

Key Points

– Net revenue retention rates in cloud software are ticking down by the quarter, a sign that businesses continue to look for areas where they can cut costs.

– Industrywide, median NRR declined to 111% in the fourth quarter from a peak of 121% in the first quarter of 2022, according to data posted last week by Altimeter Capital’s Jamin Ball.

– “More pressure on churn (as companies look to reduce point solutions in favor of platforms) and more difficult upsells have pushed net retention down,” Ball wrote.

In 2020, as data analytics software vendor Snowflake was hitting the public market, one of the key stats it was touting to investors was net revenue retention.

Snowflake’s NRR at...

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