Story image

Enterprise SaaS market to double in next three years

04 Sep 2017

Microsoft is continuing to dominate the growing enterprise software-as-a-service market with the vendor’s LinkedIn acquisition paying dividends, with Synergy Research forecasting continuing good growth for SaaS in the years ahead.

Synergy Research Group data shows the enterprise SaaS market grew 31% year on year to reach almost US$15 billion in quarterly revenues in the second quarter of 2017, with Microsoft the ‘clear leader’.

While Synergy Research says in many ways the enterprise SaaS market is now mature, spending on SaaS remains ‘relatively small’ compared to on-premise software spend.

The research company says that means SaaS growth will remain buoyant ‘for many years’, with Synergy forecasting the market will double in size over the next three years, with strong growth across all segments and all geographic regions.

John Dinsdale, Synergy Research Group chief analyst and research director, says while the IaaS and PaaS markets tend to get more attention and are growing more rapidly, the SaaS market is substantially bigger and will remain so for many years.

“Traditoinal enterprise software vendors like Microsoft, SAP, Oracle and IBM still have a huge base of on-premise software customers and they are now pushing to aggressively convert those customers to a SaaS-based consumption model,” Dinsdale says.

“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,” he adds.

When it comes to specific vendors, Synergy Research says Microsoft – which overtook long-time leader Salesforce a year ago – had burgeoning SaaS revenues when it acquired LinkedIn in Q2, further firing up its SaaS business.

Microsoft overtook long-time leader Salesforce a year ago, with Synergy Research noting that Microsoft’s SaaS revenues were rapidly growing when it acquired LinkedIn in Q2 – further firing up its SaaS business.

Salesforce continues to hold second spot, with Adobe, Oracle and SAP rounding out the top five in overall SaaS market rankings.

Synergy Research says other leading companies in the market include ADP, IBM, Workday, Intuit, Cisco, Google and ServiceNow.

“It’s notable that the mareket remains quite fragmented, with different vendors leading each of the main market segments,” Synergy Research says.

While Microsoft, Cisco and Google lead in collaboration growth, it’s Salesforce, Microsoft and Zendesk taking the lead in CRM and Oracle, SAP and Infor in ERP.

HR/HCM is dominated by ADP, Workday and Ultimate Software, while Adobe, Intuit and Microsoft take out the ‘other enterprise apps’ category.

On the system infrastructure SaaS front, Synergy Research says IBM, Oracle and SAP are the frontrunners, clocking more than 25% growth for the quarter.

Oracle, Microsoft and Google are among the vendors seeing the highest overall growth rates.

Collaboration was the highest growth segment within enterprise SaaS.

Dropbox invests in hosting data inside Australia
Global collaboration platform Dropbox has announced it will now host Australian customer files onshore to support its growing base in the country.
Opinion: Meeting the edge computing challenge
Scale Computing's Alan Conboy discusses the importance of edge computing and the imminent challenges that lie ahead.
Alibaba Cloud discusses past and unveils ‘strategic upgrade’
Alibaba Group's Jeff Zhang spoke about the company’s aim to develop into a more technologically inclusive platform.
Protecting data centres from fire – your options
Chubb's Pierre Thorne discusses the countless potential implications of a data centre outage, and how to avoid them.
Opinion: How SD-WAN changes the game for 5G networks
5G/SD-WAN mobile edge computing and network slicing will enable and drive innovative NFV services, according to Kelly Ahuja, CEO, Versa Networks
TYAN unveils new inference-optimised GPU platforms with NVIDIA T4 accelerators
“TYAN servers with NVIDIA T4 GPUs are designed to excel at all accelerated workloads, including machine learning, deep learning, and virtual desktops.”
AMD delivers data center grunt for Google's new game streaming platform
'By combining our gaming DNA and data center technology leadership with a long-standing commitment to open platforms, AMD provides unique technologies and expertise to enable world-class cloud gaming experiences."
Inspur announces AI edge computing server with NVIDIA GPUs
“The dynamic nature and rapid expansion of AI workloads require an adaptive and optimised set of hardware, software and services for developers to utilise as they build their own solutions."