CUSTOMER STORY

Swallowing the fish: CyberArk’s journey to SaaS on AWS

by AWS Editorial Team | 17 Feb 2025 | Thought Leadership

Overview

Software-as-a-service (SaaS) can be a transformative business model for software companies searching for new ways to grow, deliver value to customers, and boost their bottom line. But making the jump to subscription-based revenue is rarely—if ever—as simple as flipping a switch (or swallowing a fish, but more on that later).

A McKinsey study reveals that the keys to SaaS business success are setting realistic growth targets, prioritizing net retention, optimizing go-to-market spend, and building new businesses—fast. Identity Security leader CyberArk achieved all the above on its own SaaS journey and is now reaping the benefits.

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$100 million USD to ~$1 billion USD in annual recurring revenue (ARR)

Founded in 1999, CyberArk is recognized as a leader in the identity security market. “Our mission is to secure the world against cyber threats so together we can move fearlessly forward,” says Nili Serr Reuven, SVP of Finance. Since launching its first SaaS solution in 2019, CyberArk has developed a comprehensive SaaS portfolio exclusively on AWS infrastructure. This deep technology integration is complemented by close collaboration across global co-selling activities spanning all industries and regions, as well as multiple successful joint development initiatives.

CyberArk swallowed the fish in 2022 when growing trends toward digitalization peaked amidst the COVID-19 pandemic. Within five quarters, the company had transformed into a SaaS success story. “Today, about 70 percent of our business is SaaS,” says Reuven. “I joined the company nine years ago and the ARR was less than $100 million—we’re now approaching $1 billion.”

Okay, but why are we talking about fish?

For those concerned that they may be reading a step-by-step guide on how to consume seafood, here’s a brief explanation of what “swallowed the fish” actually means:

When a software company first switches to SaaS, revenues drop as large upfront contracts are replaced by smaller monthly fees. At the same time, infrastructure costs rise to support new SaaS offerings. As subscriptions grow, revenue builds, and costs decline due to improved delivery efficiency. Eventually, recurring revenue surpasses costs.

If you plot the above onto a graph, it would resemble, you guessed it, a fish. But a graph isn’t a guarantee, and for many business leaders, swallowing the fish seems about as risky as eating three-day-old sushi or kissing a piranha. But it doesn’t have to be that way. While every company’s journey differs, developing a solid action plan is the first step toward SaaS success.

Acceleration through innovation and acquisition

CyberArk was built on an on-premises perpetual licensing model, a model that some of its customers were hesitant to see change. “We have more than 8,000 customers, including some of the largest enterprises in the world,” says Reuven. That includes leading banks, insurance companies, and governmental agencies that initially preferred to keep sensitive assets on-premises.

In response, CyberArk prioritized flexibility. “Not all customers had to shift to SaaS on day one. We still have customers that run our classic products and provide them with support,” says Reuven. “Over time, we innovated and created new products and made it more worthwhile for customers to buy our SaaS offerings.” Acquiring SaaS native startups like Idaptive enabled CyberArk to deliver new offerings and attract new business quickly.

SaaS is a full-contact team sport

As with any business transformation, SaaS requires a cultural shift. “A company with a perpetual license model is product-focused, a SaaS company has to be customer-focused,” says Reuven. “The customer comes first in every decision we make.” CyberArk also prioritizes cross-department collaboration and transparency, from finance to research and development, marketing, and sales.

“One of our values is smart, bold but humble,” says Reuven. “We want smart people who make bold decisions but are humble enough to understand that we can achieve more together than individually. Everyone was involved and we tracked everything carefully—we want to predict churn before it happens.” That involved keeping a close eye on key metrics, including free cash flow, growth, profitability, cloud costs, usage rates, customer acquisition costs, and more.

Sticking the SaaS landing

CyberArk’s story demonstrates how SaaS—when implemented effectively and with a strategic partnership with AWS—can deliver record revenues. Success is far more likely when software companies set reasonable growth targets, budget responsibly, embrace a customer-first mindset, invest in innovation and diligently track progress. Swallowing the fish is never simple, but by following these SaaS strategies, business leaders will be more prepared to wade into the deep end.