SaaStr · 2021-01-15
· 1966d
Services Revenue Strategy for Enterprise SaaS Deals
Enterprise SaaS companies should incorporate 15-20% services revenue into five-figure and larger deals, as customers expect implementation, training, and support services. This additional revenue stream is both profitable and acceptable to investors when kept below 25% of total revenue, allowing companies to maintain SaaS valuation multiples while increasing ARR.
Metrics in this report
Hourly Rate for Services
250$
example
Assumed rate in author's early enterprise deal
Maximum Services Revenue Threshold for SaaS Classification
25%
maximum
Maintains SaaS valuation multiples with investors and acquirers
Services Gross Margin
35%
example
Qualtrics professional services
Services Revenue Potential Upside
10-25%
range
Additional revenue from not leaving services on table
Services Revenue as Percentage of Total Revenue
15-20%
standard range
Enterprise SaaS contracts (5-figure and above)