Microsoft catching up with Salesforce in SaaS revenues, argues research

(c) McComber

Microsoft has Salesforce in its sights as the leading cloudy software as a service (SaaS) vendor, according to the latest note from analyst house Synergy Research.

According to the research, the overall enterprise SaaS market grew by almost 40% in 2015, with forecasts from Synergy suggesting it will more than triple in size within five years. The consumer SaaS market, on the other hand, is only a third the size of the enterprise with a lower growth rate.

Microsoft’s comparative annual growth of 70%, compared to Salesforce’s 21%, means that they have captured more than 10% of the overall market share. Adobe and SAP are the third and fourth largest vendors in the space respectively, with ADP, Google, IBM, Intuit, Oracle, and Workday all in the top 10.

“In many ways SaaS is a more mature market than other cloud markets like IaaS or PaaS. However, even for SaaS it is still early days in terms of market adoption,” said John Dinsdale, Synergy chief analyst and research director.

“It is notable that the big three traditional software vendors – Microsoft, Oracle and IBM – are all now growing their SaaS revenues faster than the overall market and yet SaaS accounts for less than 8% of their total software revenues.”

The moves into cloud software as a service from the longer standing players has been extremely well documented, from IBM ploughing billions of dollars into their cloud play, to similar grandstanding from SAP. Oracle CTO Larry Ellison argued last March that his company would sell more SaaS and PaaS new business than Salesforce in 2015, with Synergy describing Oracle as “surging ahead”.

A recent report from identity management provider Okta found that Office 365 continues to be the most popular cloud app used in the enterprise, ahead of Salesforce and Box, while organisations are increasingly using Office and Google Apps in tandem.

Related Stories

Leave a comment


This will only be used to quickly provide signup information and will not allow us to post to your account or appear on your timeline.