Microsoft has extended its lead over Salesforce in the enterprise software as a service (SaaS) market with the LinkedIn acquisition starting to make its presence felt, according to Synergy Research.
The analyst firm, which has put out a note based on Q2 data, finds Adobe, Oracle and SAP round out the top five, with Salesforce still comfortably in the silver medal position.
Salesforce still bests Microsoft in the CRM space – the slowest growing of the buckets enterprise SaaS is measured in (below) – but Microsoft rules the roost in the collaboration category, ahead of Cisco and Google. Oracle comes out on top for ERP, with ADP leading in HR/HCM apps.
While enterprise SaaS is now considered mature in certain aspects, its spending power continues to pale against on-premise software, meaning growth will remain buoyant for many years, according to Synergy.
The company adds the SaaS market will double in size by the end of 2020.
As John Dinsdale, Synergy research director and chief analyst points out, Microsoft still has lots of on-premise customers it can turn into SaaS ones.
“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,” he said.
“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,” Dinsdale added.
Announcing Microsoft’s most recent quarterly revenues of $23.3 billion last month, chief executive Satya Nadella made a number of references to LinkedIn, saying record levels of messages were sent through a new messaging overlay, as well as discussing opportunities for product overlap through Dynamics, Microsoft’s CRM and ERP solutions, with LinkedIn’s Sales Navigator.
“In a world where customers are increasingly digitising every business process, we continue to invest and expand our portfolio of modern, modular business applications that are infused with AI,” Nadella told analysts.
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