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Report: Microsoft Remains SaaS Powerhouse

A new analyst report on the Software as a Service (SaaS) market contends Microsoft's strength in collaboration services is making it tough for other vendors to catch up.

The report this week on the enterprise SaaS market from Synergy Research Group valued the whole sector at $20 billion in the second quarter of 2018, growing at 32 percent per year.

While the Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) sectors of public cloud computing are growing faster, Synergy contends that SaaS is the biggest piece of the cloud market. Within SaaS, which is a highly fragmented market, Microsoft is dominant.

"Microsoft has a worldwide market share of over 17% and is now the leading SaaS vendor by some distance, having overtaken Salesforce nine quarters ago. Thanks primarily to its leadership in the high-growth collaboration segment, Microsoft's annual revenue growth is running at 45%, far surpassing overall market growth," the research group said in a statement.

[Click on image for larger view.]

Rounding out the top five by market share are Salesforce, Adobe, Oracle and SAP, with Cisco, Google, IBM, ServiceNow and Workday in the group behind them.

The report is good news for Microsoft partners. While there are literally of thousands of SaaS apps to choose from, partners who have expertise in the Microsoft stack have a foot in the enterprise door with Office 365 and other Microsoft SaaS applications. Those who can put together solid bundles of SaaS offerings on top of, or adjacent to, the Microsoft stack are in a strong position to expand at those customers.

Meanwhile, the Synergy report indicates there is plenty of room for continuing growth. At this point, SaaS accounts for less than 15 percent of total enterprise software spending.

Posted by Scott Bekker on August 23, 2018


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