Drew Houston and Arash Ferdowsi at the Nasdaq market site during the Dropbox IPO, March 23, 2018.
Not long ago, Salesforce was the cloud software market and Marc Benioff its billionaire evangelist. But in the last few years, scores of tech companies that make their money selling subscription services have grown quickly, gone public and made their founders exceptionally rich.
The biggest successes have even turned their creators into billionaires to the point that, while Benioff occupies the tallest building, his wealth no longer towers over that of several peers. At least eight founders of cloud software companies have joined the billionaire ranks amid the recent cloud boom.
Their ascent highlights investors’ continuing thirst for the popular business models of land and expand and recurring revenue, where software salespeople get small teams hooked on their products and then watch them spread more broadly throughout the organization, leading to bigger monthly payments. When Salesforce was getting started two decades ago, the cloud offered a new way to work. Now, it’s the way we work.
Microsoft has become the world’s most valuable public company by taking its old packaged and desktop software products and putting them in the cloud, while at the same time taking on Amazon, the second most valuable company, in providing cloud infrastructure so other companies can offload their critical infrastructure.
From collaboration and communication tools to security and software for the medical industry, a whole new generation of companies are taking over the enterprise. And while founders of popular consumer technology companies like Pinterest and Uber also now rank among tech’s nouveau riche, it’s the business software world that’s seeing a steady stream of newly-minted billionaires, a trend that appears poised to continue.
Here are some of the biggest winners in the cloud craze:
Scott Farquhar and Mike Cannon-Brookes, Atlassian
Atlassian Co-executives Mike Cannon-Brookes and Scott Farquhar at their Sydney office in 2006.
Fairfax Media | Fairfax Media | Getty Images
The co-CEOs of Atlassian each own about 63 million shares of the company, which sells software for collaboration, project tracking and code storage. Their holdings were worth almost $8 billion each at market close on Friday, topping Benioff’s net worth of about $6.6 billion. Farquhar and Cannon-Brookes were recently crowned by the New York Times as Australia’s first tech billionaires.
The pair first met at the University of New South Wales in 1998, started Atlassian in 2002 and took it public in the U.S. in 2015. Along the way, they opened a large office in San Francisco, home to several top executives. Last year, Atlassian put aside its rivalry with Slack, selling its HipChat service in exchange for a small stake in the business chat company.
In the most recent quarter, Atlassian’s revenue rose 38% from the prior year. The stock is up 41% in 2019, giving the company a market value of over $30 billion.
Farquhar has said that he and Cannon-Brookes want to provide education for 10 million children over the next decade, focusing on the developing world.
Eric Yuan, Zoom
Eric Yuan, founder and chief executive officer of Zoom Video Communications, at right, speaks with Jay Heller, head of capital markets & initial public offering execution of Nasdaq, during the company’s IPO at the Nasdaq MarketSite in New York on April 18, 2019.
Victor J. Blue | Bloomberg | Getty Images
A Chinese programmer who emigrated to Silicon Valley during the dot-com boom, Yuan took his videoconferencing company public last month and was showered with love from Wall Street. The stock has more than doubled from its IPO price, valuing the company — which is profitable — at over $20 billion.
Yuan holds close to 47 million shares in Zoom for a stake worth over $3.7 billion.
Zoom has a freemium business model that’s proven to be a major success. In the year that ended Jan. 31, more than half of the 344 customers that delivered over $100,000 in revenue originally signed on with a free product before subscribing, according to Zoom’s IPO prospectus.
Before starting Zoom in 2011, Yuan helped build the WebEx video conferencing technology and then joined Cisco through an acquisition. Now Zoom competes with WebEx, and Yuan is more likely to meet with customers over Zoom than in person.
Tobi Lütke, Shopify
Tobias Lütke, CEO of Shopify, speaks at the Collision conference in Toronto, Canada, on May 22, 2019.
David Fitzgerald | Sportsfile | Getty Images
The CEO of Shopify runs the e-commerce company far away from Silicon Valley, in the Canadian capital city of Ottawa. In 2004, Lütke’s task was to write code to sell snowboards online. The store, Snowdevil, opened for business, but Lütke and the team figured it would be a better idea to use what they learned to help the rest of the retail world sell their stuff online.
Shopify went public in 2015. Shares have since climbed more than 1,500%. In the most recent quarter Shopify’s revenue nearly doubled, and the company says its software is now used by 800,000 businesses in about 175 countries.
Lütke controls almost 8 million shares worth close to $2.2 billion.
In November, someone on Twitter predicted that Amazon would acquire Shopify in 2019. In response Lütke wrote that he would prefer to buy Amazon in 2029.
Drew Houston, Dropbox
Drew Houston, chief executive officer and co-founder of Dropbox Inc., speaks during a Bloomberg Technology Television interview in San Francisco on Aug. 14, 2018.
David Paul Morris | Bloomberg | Getty Images
It’s little surprise to see the CEO and co-founder of Dropbox on this list. Houston was famously inspired to develop a service for storing files online after realizing he left a USB stick with critical information on it at home. Dropbox has racked up half a billion registered users of its cloud syncing and sharing service, and it’s become popular with both consumers and business users.
Founded in 2007, Dropbox experienced such a rapid growth spurt in its early years that by 2011 venture investors were already valuing the company at $4 billion. That number hit $10 billion three years later. But the company has had to grow into that valuation and is still struggling to get there.
Since going public in March 2018, the stock has hardly budged, leaving Dropbox with a market cap of $9.3 billion at Friday’s close. Houston’s 94 million shares are worth $2.1 billion.
“We’re a little biased, but we think we have one of the most talented teams ever assembled, and we grow stronger every year,” he and co-founder Arash Ferdowsi wrote in a letter published just before shares started trading. Ferdowsi didn’t quite make the list — his stake is currently worth less than $850 million.
Peter Gassner, Veeva
Veeva founder and CEO Peter Gassner outside the NYSE
Ben Hider | NYSE Euronext
Gassner, who co-founded Veeva Systems in 2007, is a veteran of IBM and Salesforce. Whereas Salesforce has taken the route of building software for salespeople and marketers in any industry, Veeva has chosen the so-called vertical approach, focusing specifically on life sciences.
There are similarities with Salesforce, though. Both companies have broadened their offerings and target audience over time. Gassner now has Veeva positioned to sell a more comprehensive suite of tools to the health-care industry.
Like Zoom, Veeva was profitable at the time of its IPO in 2013. Since then, the stock has jumped from $20 to $154.29, getting a 15% boost on Thursday following a better-than-expected earnings report.
Gassner, who also sits on Zoom’s board, holds 13 million Veeva shares, worth just over $2 billion.
Jay Chaudhry, Zscaler
Jay Chaudhry, CEO of Zscaler
Adam Jeffery | CNBC
Chaudhry, founder and CEO of Zscaler, grew up in a Himalayan village. Today, people in 185 countries use technology from Zscaler, whose cloud-based software helps companies provide secure access to cloud applications.
It’s the fifth company he’s started and funded.
“My success so far has mainly been because I have very little attachment for money,” he told Bloomberg in an interview earlier this year.
Nevertheless, his wealth has been swelling rapidly. Zscaler has jumped 356% since its IPO in March 2018, giving it a market cap of over $9 billion. The 26.8 million shares Chaudhry owns are worth more than $1.8 billion.
Chad Richison, Paycom
Paycom CEO Chad Richison, fourth from left, rings the opening bell at the New York Stock Exchange on April 8, 2015.
Richison founded Paycom in 1998, and runs the cloud-based human capital management software company from Oklahoma City, near where he was born. With more than 2,000 people on staff in Oklahoma, Paycom is one of the largest employers in the state. The company competes with ADP, where Richison previously worked.
Paycom went public in 2014 at $15 a share. It closed Thursday at $212.10. Richison’s 8 million Paycom shares have a value of about $1.7 billion.