Dive Brief:
- Microsoft owns about 17% of the enterprise software as a service market, with a 34% year-over-year growth, according to Synergy Research Group's Q1 2019 report. Salesforce, Adobe, SAP and Oracle round out the top five SaaS vendors.
- Microsoft is growing at a quicker rate than the rest of the market. Of the top vendors, Salesforce had the lowest growth rate of 21% year-over-year. Adobe grew by 29%, SAP grew by 39% and Oracle by 25%.
- The rest of the SaaS market, including Cisco, Google, IBM and Workday, hold about 26% of the SaaS market. Google, Workday and ServiceNow, have the highest growth rates.
Synergy Research Group
Dive Insight:
The SaaS market brought in $23 billion in revenue made by SaaS vendors in Q1, according to the report. SaaS spending accounts for more than one-fifth of overall enterprise software spend, but has yet to reach the same growth rates as the PaaS and IaaS markets.
Though the lion's share of the enterprise SaaS market belongs to Microsoft, Synergy notes that the market is fragmented. Each vendor has a segment it leads. Microsoft does have dominance in overall SaaS segments, but Oracle leads ERP and Workday is a force in HR.
Salesforce's hold in the CRM space strengthened when it began mirroring its operations in the 1990s after Amazon gave customers the ability to shop over the web and in the cloud. The company wanted its customers to have as much ease with software as with buying a book.
Salesforce had major influence in cloud computing and since then, open, integrated, API-first cloud platforms and applications have enabled businesses to become digital-first. Legacy providers, like Microsoft, SAP and IBM, have customers still reliant on on-premise software, and are deploying strategies to aid in the shift to SaaS.
