Microsoft wins over $15bn SaaS market helped by LinkedIn acquisition
Only a year ago Salesforce was the leader in this space, however, a rapid evolving industry and multi-million Dollar M&As have transformed the SaaS market.
The enterprise software as a service (SaaS) market has grown 31% in the second quarter of 2017 versus Q2 2016 with Microsoft coming up as the number one provider in the space.
The vertical topped $15bn in combined revenues, with collaboration software being the highest growth segment, according to Synergy Research’s latest market data.
Microsoft, which has overtaken long-time market leader Salesforce a year ago, owns the largest percentage of the figure, in part helped by its $26.2bn acquisition of LinkedIn.
Salesforce ended second, despite being a strong Microsoft partner as both companies work together to make their products interoperable.
The two front runners wer followed by Adobe, Oracle and SAP, with other companies including ADP, IBM, Workday, Intuit, Cisco, Google and ServiceNow also making the top software providers rank.
Microsoft, together with Oracle and Google, saw the highest overall growth rates in comparison to all other providers during Q2.
Synergy said that in many ways the enterprise SaaS market “is now mature”, however, spending on SaaS remains relatively small compared to on-premise software, “meaning that SaaS growth will remain buoyant for many years”.
Synergy forecasts that the SaaS market will double in size over the next three years, with strong growth across all segments and all geographic regions.
Segments evaluated include collaboration, ERP, HR/HCM, CRM, and other enterprise applications. In addition, Synergy also looked in system infrastructure SaaS, which grew more than 25% in Q2 2017 compared to Q2 2016, mainly led by IBM, Oracle and SAP.
John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group, said: “IaaS and PaaS markets tend to get more attention and are indeed growing more rapidly, but the SaaS market is substantially bigger and will remains so for many years.
“Traditional enterprise software vendors like Microsoft, SAP, Oracle and IBM still have a huge base of on-premise software customers and they are all now pushing to aggressively convert those customers to a SaaS-based consumption model.
“At the same time, born-in-the-cloud software vendors like Workday, Zendesk and ServiceNow continue to light a fire under the market and help to propel enterprise spending on SaaS.”