Microsoft is progressing in its cloud business and has reached a new milestone in their cloud enterprise. 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. Other rivals in this subject include SAP, Oracle, Adobe, ADP, IBM, Workday, Intuit and Cisco, and Microsoft now successfully took the lead from Salesforce after tieing with them in Q1 at 14 percent, as reported by eWeek.
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.
SaaS is not just for enterprise, with the consumer segment also growing, especially for Microsoft with its home Office 365 subscription service, with consumer revenue doubling for Microsoft on a rolling annualized basis.
“In SaaS, a big battle is playing out between the traditional broad-based software vendors and companies that are focused on a specific application area or industry sector, many of which are entirely cloud-based,” Dinsdale 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.”
Microsoft CEO Satya Nadella likely deserves most credit for Microsoft’s growth in the cloud services segment, and overtaking Salesforce would likely be seen as a personal victory, over Salesforce turning down Microsoft’s $55 billion offer in March last year. Microsoft’s push at their Azure division has definitely made great progress in the cloud service market. Microsoft caught up to other leaders and even the giant Salesforce and finally surpassed them, but could lose in the future to Oracle that is the fastest growing SaaS provider with Microsoft following shortly after.