Microsoft leads enterprise SaaS market revenue race
The enterprise SaaS market continues to grow at an extraordinary pace and according to a new report from Synergy Research, enterprise SaaS revenue managed to pass the $100bn run rate this quarter.
Microsoft and Salesforce led the charge at first and second place respectively followed by Adobe, SAP and Oracle in the remaining top five spots.
In its earnings release for Q2, Microsoft reported $10.1bn in Productivity and Business Processes revenue with an increase of 13 percent when compared to last quarter. This division includes Office 365, the Dynamics line and LinkedIn and its increased revenue helped the software giant claim the top spot with 17 percent of worldwide market share.
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Salesforce took second place with 12 percent and in its most recent earnings statement, it announced $3.74bn in revenue. The company's Service Cloud accounted for $1.02bn in revenue by itself and this was the first time its CRM platform crossed the billion-dollar mark.
Adobe came in third place with 10 percent market share as it reported $2.74bn in revenue in its latest report. The company's Digital Media division, which includes Creative Cloud and Document Cloud, made up most of it revenue with $1.8bn.
Despite the fact that it took the SaaS market 20 years to reach the $100bn mark, it is still a significant milestone which represents how the enterprise software market has shifted from an on-premises to cloud model in recent years.
According to Synergy Research, the enterprise SaaS market still has a ways to go as SaaS revenue still accounts for only 20 percent of the overall enterprise software market.
Chief analyst at Synergy Research Group, John Dinsdale provided further insight on the findings of the report as well as his predictions for the future of enterprise SaaS, saying:
“The SaaS vendor landscape essentially breaks out into three camps – traditional enterprise software vendors, relatively new born-in-the-cloud players and large IT vendors that are looking to expand more into software markets. In the first camp you have companies like Microsoft, SAP, Oracle and IBM that have a huge base of on-premise software customers that they can convert to a SaaS-based consumption model. Born-in-the-cloud vendors include Workday, Zendesk, ServiceNow, Atlassian and Splunk, who tend to have much higher growth rates. Meanwhile Google and Cisco are making an impact in the SaaS market, via Google’s G Suite and Cisco’s collaboration apps and multiple software vendor acquisitions. There will be consolidation, with the impending Salesforce acquisition of Tableau Software being a prime example, but there will remain many opportunities for new market entrants to make an impact.”
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