Meantime, AI upstarts are adding billions in revenue; Azure, GCP and AWS – powering the AI shift – are growing 20-30%. The growth playbook has changed.

Coatue's 2025 EMW conference data paints a stark reality:

Median NTM (next 12 months) growth for traditional SaaS sits at just 9%.

Meanwhile hyperscalers powering the AI transformation posted Q1 growth of 33% (Azure), 28% (GCP), and 17% (AWS).

This shows the shift in how software gets built, and scaled.

Hyperscalers aren't slowing

Cloud commits are growing >20% YoY in addition to revenue, approaching $500B this year, while these 3 giants invest >$250B in CapEx this year alone.

"Before this generation of AI, we thought AWS had the chance to ultimately be a multi $100 billion revenue run rate business. We now think it could be even larger," emphasized Andy Jassy, Amazon CEO recently.

Not only is cloud infrastructure powering everyone else, but their marketplaces are becoming the primary distribution channel as customers consolidate spending and seek AI-enabled solutions.

AI-first companies have added $15B in revenue in the last 2 years and their growth is literally exploding, highlights Coatue

Smart software companies are leveraging both AI and hyperscalers to achieve this acceleration.

Case in point: Glean, an AI-first startup, grew 42X on Google Cloud marketplace in a year, with 60% of their top FY25 deals flowing through GCP Marketplace.

Not to mention OpenAI (which powers Microsoft Azure) that just hit $10B ARR this week, doubling from last year and targeting $125B in revenue by 2029 (The Information).

The $500B SaaS industry faces a reinvention moment across three critical dimensions:

Product evolution

Embedding AI to drive measurable customer value, not just feature checkboxes

Distribution transformation

Adding to your sales playbook the marketplace-first GTM strategies that align with how enterprises buy today

Partnerships depth

Moving beyond traditional channel relationships to co-innovation partners and with hyperscalers who control infrastructure and increasingly customer budgets

While the shift is complex, the reinvention success stories are telling:

Salesforce is not only all-in on AI agents, but it became "the fastest growing ISV on AWS Marketplace," transacting $2B through AWS while tripling year-on-year.

Notion, after adding AI to their successful product foundation, now closes over 50% of deals with AI attached. Their largest enterprise deal was closed via Amazon Web Services (AWS) Marketplace.

– both proving that established companies can embed AI and successfully pivot to marketplace GTM strategies.

As AI companies sprint to billions while 95% of traditional SaaS hovers at 9% growth, which side of history will your GTM strategy land on?

Source/slides