More $10 billion software companies are being minted than ever before — here's why

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Datadog went public on Thursday and instantly hit a $10 billion valuation, becoming the fourth cloud software debut to reach that level this year.

Jason Lemkin, an investor at SaaStr, sees the cloud market continuously opening up to more categories, expanding the overall pie. According to, the global market for public cloud services will climb 17.5% this year to $214.3 billion. That money is being spread across many areas, including productivity apps, developer tools, security and backend infrastructure.

The 2019 class is particularly attractive to investors because the biggest of them show extremely high customer retention rates, meaning that they're very efficient with their sales and marketing dollars. Not only are customers sticking around, but they're increasing the size of their contracts. Eric Yuan, CEO of Zoom Video Communications poses for a photo after he took part in a bell ringing ceremony at the NASDAQ MarketSite in New York, April 18, 2019.Crowdstrike and Datadog are by far the most expensive software companies across the entire market, with each valued at 39 times revenue or higher, according to FactSet.

 

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The rise of Big Data. It drives ML and AI. It is fueling ADmerica which means the appetite is huge for analytics. It also means the fall will be spectacularly gruesome.

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