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Microsoft has overtaken Salesforce to become the leading software as a service (SaaS) vendor despite a fragmented market, according to the latest note from Synergy Research.

The analyst firm, which extensively covers cloud software and infrastructure markets, argues that with the latest Q2 data to hand, the global enterprise SaaS market grew by 33% year on year to hit more than $11 billion (£8.3bn) in quarterly revenues.

The space is divided up by Synergy into several buckets. Collaboration, the largest segment, grew by 37% and has Microsoft, Cisco, and Citrix as leaders. Perhaps surprisingly, the analysts see the ERP market as the quickest growing, by 49% year on year and Oracle, SAP and NetSuite as the leaders.

The former was acquired by the latter for $9.3bn in July, and at the time, Synergy chief analyst John Dinsdale argued the move would help bolster Oracle’s play in ERP, as well as CRM, although still being behind Microsoft and Salesforce. CRM is considered by the analysts as the smallest segment, behind HR and human capital management (HCM), of which the leaders are ADP, Workday, and Ultimate Software, system infrastructure SaaS, with IBM, SAP and Oracle leading the way, and a more general bucket for other enterprise apps.

Dinsdale argues that with this analysis, the widely thought concept of the ‘born in the cloud’ companies biting at the heels of the established legacy software vendors may be something of a misnomer. “In SaaS a big battle is playing out between the traditional broad-based software vendors and companies that are focused on a specific application or industry sector, many of which are entirely cloud based,” he said.

“It might be tempting to assume that the latter camp are leading the charge, but in fact the traditional software vendors are growing their SaaS revenues more rapidly, helped by their huge base of on-premise software customers that can be aggressively targeted for conversion to a SaaS consumption model,” Dinsdale added.