Ask HN: Why Sales cost so high for SaaS companies?

1 point

4 years ago

Sales & Marketing account for almost 50% of revenue for most SaaS companies. This is often double what they spend on R&D.

See https://miro.medium.com/max/2406/1*nmQhFQD-MYWGwG1wc-sXHw.png

For more specific examples, for the year 2020:

Confluent - Sales:150M, R&D:100M, Revenue: 230M

DataDog - Sales:160M, R&D:110M, Revenue: 350M

Salesforce - Sales:7B, R&D:2B, Revenue: 16B

I assume most of R&D is just engineering salaries. But what constitutes Sales expenses? Is it just Salespeople salaries and commissions? If not, what are the major contributors?

https://investors.datadoghq.com/static-files/9d3083a2-f95f-48be-a413-c35d154a3046

https://s23.q4cdn.com/574569502/files/doc_financials/2021/ar/Salesforce-FY-2021-Annual-Report.pdf

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