The joy of SaaS: Cloud enterprise software market grows to $15bn

1 Sep 201746 Shares

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Microsoft remains the overall leader in terms of enterprise SaaS revenues.

The enterprise software-as-a-service (SaaS) market grew 31pc year on year to reach almost $15bn in the second quarter, according to new Q2 data from Synergy Research Group.

Microsoft remains the clear leader in overall enterprise SaaS revenues, having overtaken long-time market leader Salesforce a year ago.

‘IaaS and PaaS markets tend to get more attention and are indeed growing more rapidly, but the SaaS market is substantially bigger and will remain so for many years’
– JOHN DINSDALE

The Seattle software giant was already rapidly growing its SaaS revenues but, in the second quarter, its acquisition of LinkedIn gave its business a further boost.

In terms of overall SaaS market rankings, Microsoft and Salesforce are followed by Adobe, Oracle and SAP, with other leading companies including ADP, IBM, Workday, Intuit, Cisco, Google and ServiceNow.

Among the major SaaS vendors with the highest overall growth rates are Oracle, Microsoft and Google.

A mature audience

The joy of SaaS: Cloud enterprise software market grows to $15bn

Forecast is cloudy with a spot of SaaS. Image: Synergy Research Group

The figures show that the SaaS market is maturing.

However, spending on SaaS remains small, compared to on-premise software.

Synergy forecasts that the SaaS market will double in size over the next three years, with growth in all segments worldwide.

“Infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) markets tend to get more attention and are indeed growing more rapidly, but the SaaS market is substantially bigger and will remain so for many years,” said John Dinsdale, chief analyst and research director at Synergy Research Group.

“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.

“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 said.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com