2017 North American Market Size

 

 

North American Sales Intelligence Market Sizing Model (Excel)

The 2017 Market Size of North American Sales Intelligence Vendors. Includes vendor product features, market share, and notes. GZ Consulting Copyright 2018.

$750.00

For the past few years, I have been sizing the North American Sales Intelligence Market.  This is the largest of the markets as Europe and AsiaPac are more fragmented (the UK is the only other mature market).

In 2017, I estimated the market at $950 million with LinkedIn Sales Navigator as the top vendor.  While new firms continue to enter, the top four vendors earn two of every three dollars in the industry.  The top four  concentration increased 7% last year, mostly due to the acquisitions of Avention and RainKing.

LI SN Market Share
The LinkedIn Market Share Section of the 2017 North American Sales Intelligence Market Sizing

The industry grew 17% over the past year with the majority of this growth being captured by LinkedIn Sales Navigator, DiscoverOrg, and ZoominfoTechTarget, which was off my radar in 2016, has also seen rapid growth in 2017 and 2018.

DiscoverOrg acquired RainKing at the end of August 2017 so two-thirds of its revenue was recognized as RainKing and one-third as part of DiscoverOrg.  Combined, the two firms earned around $118 million least year with DiscoverOrg ending the year with a $130 million plus ARR.  DiscoverOrg raked in two of every three dollars within the technology sales intelligence sub-segment.

LinkedIn holds a nearly 30% market share.  It has grown rapidly while remaining under the radar of its peers as it is often used as a complementary service to other sales and marketing intelligence services.

Data.com’s 2017 revenue was stable but Dun & Bradstreet forecasted a 30% drop in 2018 (D&B is a revenue share partner on the service).  I anticipate that much of this revenue will shift to other vendors in 2018 and 2019.  Dun & Bradstreet is in a strong position to take much of this share, but other vendors are pushing hard to acquire Data.com clients.

Zoominfo was ahead of the other sales intelligence vendors in recognizing the value of adding marketing functionality alongside their sales tools.  This has put them in a strong position for data services.  They also built the deepest set of global contacts with emails and direct dials and were early to build out connectors (CRM, MAP, Sales Engagement, and Chrome).

I am making my market model available for license (See PayPal button at top) as an Excel spreadsheet.  It includes revenue numbers by company along with market share, key features, and notes.

DiscoverOrg: 8 Years on the Inc. 5000

DiscoverOrg Revenue.png
DiscoverOrg continued its blistering growth.  It acquired RainKing at the end of August 2017 so only four months ($13 million est.) of RainKing revenue was included in DiscoverOrg’s 2017 revenue.  Another $26 million (est.) will show up in DiscoverOrg’s 2018 revenue.  The CAGR and revenue data was sourced from the 2014 through 2018 Inc. 5000 lists.

DiscoverOrg made the Inc 5000 list for the eighth straight year with three-year revenue growth of 184%.  The revenue was boosted by the acquisition of RainKing last August, but the firm would have made the list even without the acquisition.  Over the past six years, DiscoverOrg posted a compound average growth rate (CAGR) of 60%, growing revenue from $5.5 million in 2011 to $91.9 million in 2017.

“For 10 years, our singular focus has been on how to fuel our customers’ pipeline and revenue growth with the best B2B data available anywhere,” said Henry Schuck, DiscoverOrg CEO. “Being named to the Inc. 5000 list for the eighth consecutive year–and especially at the size and scale we are now–demonstrates our continued unwillingness to settle for anything less than excellence.”

Last year, DiscoverOrg more than doubled its database and increased its headcount by 50%.  DiscoverOrg’s Annualized Recurring Revenue (ARR) was over $130 million at the end of the year, indicating the firm was in a strong position to make the list again in 2019.  DiscoverOrg only recognized around $13 million in 2017 RainKing revenue over the final four months, so approximately $26 million in additional subscription revenue will hit their books in 2018.

2017 organic revenue growth was around $19 million.

“Out of the nearly seven million private companies moving the economy forward every day, only a tiny fraction have demonstrated such remarkably consistent high growth.  DiscoverOrg’s eighth Inc. 5000 honor truly puts the organization in rarefied company.”

  • James Ledbetter, Inc. Editor-in-chief

What is even more impressive is that DiscoverOrg passed InsideView and Avention (now D&B Hoovers) in revenue with a service that focused on the technology space while the broader sales and marketing intelligence services target the technology space, business services, professional services, and financial services.

DiscoverOrg has distinguished itself through

  • High quality data collected by its large editorial team
  • High fill rates on emails and direct dials
  • Technology and general sales triggers (Scoops)
  • Org charts at both the C-level and along functional lines
  • Biographies with technical skills and responsibilities
  • AI recommendations around both similar companies and recommended executives (AccountView)
  • OppAlerts Intent data (three-premium)
  • A broad set of CRM, MAP, Sales Engagement, and Browser connectors.

“Great data is magic,” tweeted the firm.

Or course, DiscoverOrg wasn’t the only B2B Sales Intelligence, Sales Engagement, or DaaS company to make the list.  I will cover Zoominfo, SalesLoft, and these other firms tomorrow.

DiscoverOrg Rolls Past $130M ARR

DiscoverOrg closed 2017 with an Annual Recurring Revenue in excess of $130 million. Data Source: Inc. 5000.
DiscoverOrg closed 2017 with an ARR in excess of $130 million. Source: Inc. 5000.

Sales and Marketing Intelligence vendor DiscoverOrg crowed about its 2017 performance with growth in Annual Recurring Revenue (ARR), customers, staff, and data coverage.  The firm, which acquired its top competitor RainKing in August, exceeded $130 million in ARR, above projections at the time of the acquisition.  As subscription revenue is recognized over the life of the contract, 2017 revenue was likely between $110 and $120 million.  DiscoverOrg, which has long stated that it is profitable and cash flow positive, also exceeded its profitability target for 2017, but did not provide details.

DiscoverOrg employment grew to more than 500 employees in Maryland, Washington, and Pennsylvania.  Headcount increased by 50%.  The additional staff allowed DiscoverOrg to grow the database and “deliver an unparalleled customer experience” through an expanded customer success team, redesigned customer training and certification programs, and user experience improvements to both platforms.

The customer base grew by more that 25% to greater than 4,000.

“After the acquisition of RainKing in August 2017, we made a commitment to our combined customer base that they would be able to access more high-quality data as we brought the businesses together,” said Henry Schuck, DiscoverOrg CEO. “In the five months since the acquisition, we more than doubled the datasets our customers access. This phenomenal increase means that our customers are more effective at finding, connecting, and selling to their target buyers.”

In 2017, DiscoverOrg launched SMB and HR datasets which provided a “larger addressable target market for DiscoverOrg and a more diversified customer base.”  A few weeks ago, DiscoverOrg released its Legal and Compliance dataset.

Following the merger, the firm swiftly combined the RainKing and DiscoverOrg company and contact universes.  DiscoverOrg contact coverage expanded 124% while the RainKing universe grew 127%.  With respect to global companies, counts increased 82% to 130,000.

In 2018, DiscoverOrg plans to further grow its database and develop ”new tools and applications that make the data even more easily actionable for sales and marketing teams,” said Chief Growth Officer Katie Bullard.  “Our roadmap is focused on enabling our customers to build an end-to-end pipeline engine with DiscoverOrg’s data as the foundation.”

While the coverage continues to increase, they have maintained their data research focus.  “We repeatedly hear from sales and marketing organizations that the overwhelming abundance of data available today— mostly low-quality and unverified—actually makes it harder for them to do their job effectively,” said Bullard. “We have focused on delivering both the right data and the right tools to make sense of that data in a simple and practical package. The result is that our customers get to market faster, build more pipeline, and close deals more often than their competitors.”

2016 North American Market Size

North American Sales Intelligence Market Sizing Model (Excel)

The 2017 Market Size of North American Sales Intelligence Vendors. Includes vendor product features, market share, and notes. GZ Consulting Copyright 2018.

$750.00

For the past few years, I have been sizing the North American Sales Intelligence Market.  This is the largest of the markets as Europe and AsiaPac are more fragmented (the UK is the only other mature market with Bureau van Dijk, Avention UK, Artesian Solutions, and DueDil offering full solutions).

In 2016, I estimated the market at $770 million with LinkedIn Sales Navigator as the top vendor.  While new firms continue to enter, the top ten firms (now eight following the 2017 acquisitions of Avention and RainKing) earn seven of every eight dollars in the industry.

I am making my market model available for license (See PayPal button at top) as an Excel spreadsheet.  It includes revenue numbers by company along with market share, key features, and notes.

The LinkedIn Market Share Section of the 2016 North American Sales Intelligence Market Sizing
The LinkedIn Market Share Section of the 2016 North American Sales Intelligence Market Sizing

I have also broken out two sub-categories: Predictive Analytics and Tech Sales Intelligence.  Predictive Analytics vendors continue to scuffle in the marketplace.  Last September, Gartner sized the global market at between $100 and $150 million.  I have gone back and forth on whether to include them in the larger sales intelligence space, but several of the sales intelligence vendors have added light predictive tools (e.g. Avention, DiscoverOrg, RainKing) while the predictive analytics companies have moved to add enrichment and provide more insights to sales reps.  As such, I see the two product categories moving towards each other so chose to include Lattice Engines, Leadspace, and similar firms.

The Tech Sales Intelligence category (e.g. DiscoverOrg, RainKing, Aberdeen, Corporate360) continues to show strong growth and makes up just over 15% of the market.  Both DiscoverOrg and RainKing have posted remarkable growth over the past few years and merged their efforts last month.  Post acquisition, they are the number three vendor in the space and may hit $120 million in 2017 revenue.  The new powerhouse has 4,000 customers and is looking to expand beyond technology sales to become a general purpose sales intelligence solution.

Acquiring RainKing should move DiscoverOrg well past Data.com (Salesforce) which will likely see declining 2017 revenue.  Salesforce has dropped the ball on Data.com.  They overpromised and under-delivered for years, relying on their ability to bundle the offering with other SFDC products.  As of last month, they are no longer able to deliver Dun & Bradstreet content (D&B WorldBase, Hoovers, and First Research) to new customers (legacy customers retain access).  Unless Data.com has a major content partner announcement at Dreamforce, it is likely to see significant revenue declines in 2017 and 2018 as customers switch to D&B Hoovers for Salesforce and other offerings.

Dun & Bradstreet re-established itself as the #2 vendor in the space with the January 2017 acquisition of Avention and the rebranding of Avention OneSource as D&B Hoovers.  Both companies have struggled to grow revenue with Avention growing slowly over the past few years and Hoovers declining.  However, infusing Avention products with Dun & Bradstreet content both reduces the underlying cost structure of Avention offerings and improves the depth and quality of the content.  Furthermore, Dun & Bradstreet has a much larger sales force which previously has lacked a credible global sales intelligence offering.  Hoovers classic generated nearly all of its revenue in the United States.  Over the next two years, expect to see significant revenue shift from Hoovers Classic to D&B Hoovers.

Three-Toed Sloth By Stefan Laube (Tauchgurke) - Public Domain.
Three-Toed Sloth By Stefan Laube (Tauchgurke) – Public Domain.

Finally, LinkedIn Sales Navigator has established itself as the clear number one vendor in market revenue.  The product didn’t exist five years ago and its competitors still tend to dismiss this gorilla in their midst.  How can they be missing the #1 vendor in the space?  Easy — the gorilla is well camouflaged and appears to be more of a three-toed sloth sleeping in the forest canopy.  Sales reps all use the freemium version of LinkedIn so give little thought to delve further when they ask “how are you obtaining your account intelligence today?” and the response is LinkedIn.  Thus, they enter LinkedIn as the competitor into their CRM, not Sales Navigator.  A few months later when they lose the opportunity, the rep then enters “no decision” into the CRM instead of recognizing a competitive loss.  I have been warning vendors in the space for years about this phenomenon, but they have failed to understand the threat of a gorilla that looks like a three-toed sloth.


N.B. Three-toed sloths inhabit Central and South America and gorillas Central Africa.  This is a metaphor.

Sales Intelligence Vendors in the Inc. 5000 List (2017)

Several Sales Intelligence and business data vendors made the 2017 Inc. 5000 list.
Several Sales Intelligence and business data vendors made the 2017 Inc. 5000 list.  Data from Inc. with analysis by GZ Consulting.

Inc. published its annual Inc 5000 list of fastest growing US private companies this week. Several firms covered by this newsletter made the list including Synthio, DiscoverOrg, RainKing, Zoominfo, and Pure Incubation. To qualify for the list, companies must be private and have at least $200,000 in 2013 revenue.

DiscoverOrg made the list for the seventh year in a row with 2016 revenues of $59.4 million, up $15 million. The firm is in a strong position to make the 2017 list as they closed 2016 with an ARR of $71 million. DiscoverOrg’s three-year Compound Average Growth Rate (CAGR) was 40%.

“Our mission remains focused on accelerating our customers’ pipeline and revenue growth—we can only grow when they grow,” said CEO Henry Schuck. “Since our inception 10 years ago, our customers have experienced the difference our unmatched data has on their own sales. Making the Inc. 5000 list for the seventh time is a reflection of their trust and of our mutual success.”

Along with financial growth, the company has continuously grown its editorial-based content while expanding the functional and integration capabilities of its service. While originally focused on providing company and IT executive profiles for US sales reps, the company has globalized its coverage, extended into marketing tools, and added additional job functions including sales, marketing, HR, and Product Management (TEDD) to its database. By including CRM and MAP connectors, analytical tools, and light predictive scoring, the firm has increased the value it provides to companies across a broader set of job functions (marketing, exec recruitment, strategic sales, and sales operations) and found additional ways to augment the value of each record. In so doing, they have been able to maintain a profitable, cash-flow positive growth trajectory over a decade.

“Only a tiny fraction of the nation’s companies have demonstrated such remarkably consistent high growth,” said Eric Schurenberg, President and Editor in Chief, Inc. Magazine. “This achievement truly puts DiscoverOrg in rarefied company.”

DiscoverOrg’s top competitor RainKing also made the list for the fourth consecutive year. 2016 revenue rose $6.9 million to $33.9 million. RainKing has a three-year CAGR of 29%.  Two weeks ago, DiscoverOrg acquired RainKing.

“This has been a transformational year for RainKing and this award is a recognition of the satisfaction of our customers and the accomplishments of our employees,” stated RainKing CEO John Stanfill. “We have had some significant accomplishments over the past twelve months which have helped fuel our growth, but the biggest factor in our success is our ability to help our customers grow their businesses faster.”

Among the recent content and platform enhancements were a new user interface, coverage expansion to 65,000 companies and one million executives, the launch of a Federal IT dataset, and rebranding. The firm also moved to larger office space in Bethesda, Maryland.

New York-based Madison Logic made the list for the fifth consecutive year with a three year CAGR of 43%. CEO Tom Regan said, “We’ve developed the only comprehensive account based marketing solution that unifies display advertising, lead generation and advanced measurement capabilities that enable marketers to achieve a quantifiable return on investment.”

Zoominfo, which was bought by private equity firm Great Hill Partners last week, had a three-year CAGR of 39% with 2016 revenue of $39.8 million. The firm successfully pivoted into marketing services a few years ago with contact data enrichment services, list building, web forms, segmentation analysis, and cluster analysis. The firm has over 5,000 enterprise clients.

“ZoomInfo’s positioned for staggering advancement on both the employee and technology front,” said CEO Yonatan Stern. “As we continue on this journey we are focused on creating even more value for our customers.”

Zoominfo was acquired by PE firm Great Hill Partners in August.

Other sales and marketing firms that repeated on the list were Pure Incubation (44% three-year CAGR), Synthio (111% three-year CAGR), and List Partners (27% three-year CAGR).


2016 List

News Alert: DiscoverOrg Acquires RainKing

DO plus RK

Marketing and Sales Intelligence vendor DiscoverOrg acquired RainKing on Friday and announced it this afternoon.  Both firms employ large editorial teams for building and maintaining company and contact datasets and technology platform details (e.g. vendors, products, project plans).  This is the second acquisition of a competitor by DiscoverOrg which bought iProfile two summers ago and quickly integrated iProfile’s international coverage into the DiscoverOrg universe.

According to Inc., RainKing posted 2016 revenue of $33.9 million, up $6.9 million.  Combined, the two firms had 2016 revenue of $88.3 million and a 160% three-year growth rate.  The combined firm has an Annual Recurring Revenue (ARR) in excess of $120 million.  DiscoverOrg’s 2016 end-of-year ARR was $71 million.

“The path to rapid revenue growth is paved with highly accurate, actionable, and predictive sales and marketing data, and the combination of RainKing and DiscoverOrg means that our joint customer base has access to an extraordinary portfolio of data, contextual buying insights, and predictive intelligence.  We are building a company that is to sales and marketing intelligence what Salesforce is to CRM.”

  • DiscoverOrg CEO Henry Shuck

The plan is to immediately merge their coverage into a single database delivered via both platforms.  RainKing customers will benefit from deeper coverage of non-IT execs (e.g. sales, marketing, HR, product management), the assignment of Customer Success Managers to their accounts, and access to DiscoverOrg’s TiLT training for SDRs.  DiscoverOrg users will benefit from deeper company and contact coverage, particularly in Europe, along with a larger editorial team building out and maintaining the combined database.  Both groups of customers will benefit from additional datasets in the DiscoverOrg research pipeline including a new one which will be announced in the next sixty days.

RainKing customers will continue on their current platform for at least a year until RainKing functionality is merged with that of DiscoverOrg.

The combined datasets will span over two million contacts and over 100,000 global companies.  As both firms maintain high quality data standards, DiscoverOrg’s 95% accuracy guarantee will be maintained.

The deal is a cash transaction, though DiscoverOrg did not reveal the price.

Schuck provides additional details on his vision for DiscoverOrg and the acquisition in this YouTube video:

GZ Consulting Take

I have been tracking DiscoverOrg and its CEO Henry Schuck for over a decade.  For a long time, I viewed them as a niche offering in the tech space competing against three other firms of roughly the same size (RainKing, iProfile, and SalesQuest).  Due to competition and the cost of editorial resources, I figured they would plateau in their market coverage below that of the Hoover’s editorial dataset of 43,000 companies.  With more exacting editorial standards and three direct competitors, it was difficult to see how the marginal cost of adding and maintaining the 40,000th profile was less than the marginal revenue for the 40,000th profile (Microeconomics 101 would contend that the rational firm would keep building additional profiles until MC = MR).

But I made several errors in my assumptions.  Most importantly, I built in the additional cost of editorially maintained content without properly understanding the value of the data to clients, particularly as DiscoverOrg and RainKing extended their functionality into the marketing department and added light predictive tools such as ranking and scoring of prospects.  Adding marketing and integration tools greatly increased the value of every profile within their databases and allowed clients to distribute the cost of licenses over both sales and marketing departments.  The advent of Big Data and Predictive Analytics also increased the value of high quality company and contact data within CRMs and MAPs.

DiscoverOrg and RainKing quickly outgrew their other competitors resulting in the acquisition of SalesQuest by Avention and iProfile by DiscoverOrg.  While other firms have entered the IT profiling market, they either focus on technographics (e.g. Datanyze, BuiltWith, HG Data) or remain much smaller (e.g. Corporate360).

Finally, the growth of ABM and a focus on top accounts increases the value of a top company database with rich targeting variables such as tech platforms and projects.  “As the market continues to move toward account-based engagement built on a deep understanding of buying centers, investing in high quality data has become even more critical,” opined John Donlon, Sr. Research Director at SiriusDecisions.  “Simply relying on information scraped from the web is not enough to succeed, but leveraging human-verified sales and marketing intelligence gives organizations a distinct advantage in all aspects of revenue generation.”

Initially, the merger is a win-win for the 4,000 DiscoverOrg and RainKing clients, immediately providing deeper company, contact, and technology opportunity coverage for their 70,000 clients.  It also provides a runway from which DiscoverOrg can quickly grow its coverage including RainKing’s new Federal IT dataset.  According to the firm, “Our roadmap is focused on accelerated data collection, deeper practical predictive intelligence, enhanced account-based marketing capabilities, and seamless data optimization and enrichment in CRM, marketing automation, and sales engagement tools.”

While DiscoverOrg could use the merger as an opportunity to raise prices, my guess is that prices will remain stable so that DiscoverOrg can position itself to take on sales and marketing intelligence vendors such as D&B Hoovers, InsideView, LinkedIn Sales Navigator, and Zoominfo.  However, if DiscoverOrg is going to become the Salesforce of sales and marketing intelligence, the firm needs to expand its non-IT content beyond executives to include strategic company and industry intelligence.  It is through the marriage of best-in-class executive intelligence (emails, direct dials, responsibilities, bios, social links, and org charts) with financials, filings, news, industry overviews, and SWOTs that DiscoverOrg will be able to go mano a mano with Dun & Bradstreet and LinkedIn in the broader sales intelligence market.  Under this scenario, DiscoverOrg can continue to build out its best-in-class content set while licensing non-core content from other vendors.

This has been a year of significant M&A activity which has reduced the number of sales intelligence datasets on the market.  Beyond DiscoverOrg/RainKing, Avention was acquired by Dun & Bradstreet to become their new D&B Hoovers platform (Dun & Bradstreet content fueling Avention’s functionality and connectors), Moody’s purchased Bureau van Dijk, Zoominfo was bought by PE firm Great Hill Partners, and Unomy was picked up by co-working company WeWork.  The result is the phase out of the old Hoovers platform, uncertainty about Bureau van Dijk’s commitment to its Mint sales platform, and the withdrawal of Unomy and RainKing from the market (they will continue on in the near term, but are no longer being marketed).  The future of Data.com is also in question as Salesforce has failed to announce a path forward for their AppExchange solution now that Dun & Bradstreet content is no longer available to new clients.

RainKing Federal IT Dataset

RainKing Org Charts provide headshots, social media links, contact information, and organizational position.
RainKing Org Charts provide headshots, social media links, contact information, and organizational position.

RainKing officially release their Federal IT dataset on April 18th.  The new offering covers federal agencies including Defense, Health and Human Services, Homeland Security, Veteran Affairs, Treasury, Transportation, Agriculture, Commerce, Justice, State, Energy, Social Security Administration, and NASA.  Quasi-governmental agencies such as the USPS, Fannie Mae, and Amtrak are also covered.

The 2016 tracked spend hit $76 billion.

“The federal government represents a massive opportunity for software and technology companies to tap into a steadily growing market,” stated RainKing CEO John L. Stanfill. “This new dataset will be valuable in helping our customers quickly identify and connect with the right decision makers across the federal government.”

Profiles span a broad set of governmental and technographic data including

  • Org charts which “are equal in depth to the rest of the database, mapping decision makers (executives), influencers, procurement officers, etc.”  Org charts span departments, agencies, and sub-agencies.
  • Complete profiles and contact information for these individuals
  • Current IT budget
  • Technologies-in-use and those responsible for them
  • Daily investment signals for active projects, RFPs, and upcoming technology investments –including the decision maker for these projects
  • Location details for headquarters and other offices within the departments/agencies
  • Other relevant department/agency information

“Unlike with other sources of Federal projects and initiatives, RainKing’s intelligence focuses on the actual decision makers and budget holders, not just the government procurement managers,” said the firm.

RainKing maintains a sixty-day editorial review cycle and plans to continue expanding their Federal coverage.  The firm currently provides 100,000 Federal, State, Local, and Education decision makers.

“This dataset is different than any other existing solution, because in one view, our clients can not only search for active projects and RFPs, and pinpoint the actual decision makers responsible for those projects, but they can also gain insight into the existing technology environment within the agencies and bureaus. This is immensely valuable from a competitive standpoint,” said Jennifer Kitchen, Chief Content Officer at RainKing.

Customers can purchase the dataset individually or alongside other RainKing files spanning 60,000 global companies and one million executives.  They pre-sold over fifty clients.

RainKing has been rapidly growing its company and contact coverage over the past few years.  Their editorially-gathered dataset now spans over one million financial decision makers across nearly 60,000 global organizations.

The RainKing Prediction Engine suggests and ranks contacts.
The RainKing Prediction Engine suggests and ranks contacts.