      SaaStr · 2019-10-12
      · 2426d
    

Enterprise SaaS Silo Strategy: Benefits and Limitations for Scaling Growth

Jason Lemkin analyzes the limitations of the silo-in-the-enterprise sales strategy for SaaS companies, where small groups within large enterprises adopt products independently. While silos provide valuable logo accounts and early revenue, they rarely expand organically across departments and may distract from higher-value enterprise-wide deals that drive greater long-term growth.

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Metrics in this report

ARR at Scale Inflection

$1M to $20M$

range

SaaS companies transitioning from silo-focused to enterprise-focused sales strategies

Minimum Enterprise Deal Size

$10-20M$

minimum threshold

Salesforce-scale SaaS companies at $5B+ ARR

Organic Expansion Probability

1%%

approximately

Likelihood of silo to spontaneously expand to other departments without intervention

Reference Accounts Sufficiency Threshold

5-10accounts

per segment

Number of logo accounts needed before incremental logos provide diminishing value

Revenue Multiple of Direct Enterprise Sale

50xmultiple

relative to silo deals

1,000 seats direct deal vs 20 seat silo deal