Comment by carlsborg

I suspect the following is built into valuations of many software companies with subscription revenue models: they can reduce headcount dramatically and keep a relatively tiny headcount of staff around to sustain the existing recurring revenue and be highly profitable even in a slowing economy. For example how many people would MongoDB, with close to a billion dollars of annual revenue, need to keep the lights on, assuming zero new feature development, sales or marketing? The software is already sold and integral to the enterprise projects that use it, and in the enterprise migration to a new vendor is often a considerable project in itself.