The market for enterprise technology products is booming, with 72 percent of high-technology providers reporting growth in sales quote volumes, and 42 percent reporting accelerating sales cycles, according to a report from SteelBrick.
The report analyzes how enterprise tech vendors are selling to customers and also compares current B2B selling trends to this time last year. Results are based on findings from over 130 SteelBrick customers, 80 percent of which sell software- as- a- service (SaaS), storage, cloud infrastructure, telecommunications, networking, and big data technologies.
“While we expected growing demand, we were surprised to see that sales cycles were speeding up for 42 percent of companies since competition has been growing as well, with more and more well-funded start-ups entering the fray,” SteelBrick CEO Godard Abel told eWEEK. “Clearly this means that the growth in demand is outstripping the growth in supply.”
Abel explained the sales boom for enterprise tech is being driven by two trends, the first being the shift of enterprise computing to the cloud, and secondly, the mushrooming volume of big data. .
While sales cycles range from same day to over a year on average, high-tech companies report sales cycles of 100 days (or three to four months), and 42 percent of companies report sales cycles accelerating over the past year. Only 11 percent report slowing sales cycles.
“The shift to the cloud is driving tremendous demand for both software- as- a -service and platform- as- a- service from the likes of Salesforce and Amazon,” he said. “Meanwhile, the tremendous amount of rich content being created and shared online is creating tremendous demand for appliances that can support all the computing power and storage needs. Big data vendors such as Cloudera and storage providers such as Nimble Storage and Nutanix are really benefiting.”
On average, high tech companies are successfully closing 38 percent of quotes issued, again indicating robust demand, the report said.
“We expect these growth drivers of the shift to the cloud and the mushrooming of big data to continue. We are still in the early days of the shift to the cloud, as according to Bessemer Ventures’ recent cloud report, only the CRM market has even gotten to 50 percent adoption,” Abel predicted. “For big data there is no end in sight as more and more video and other rich content are streamed and shared on sites such as Netflix and Facebook.”