Microsoft Climbs Ahead of SalesForce: The Telltale Numbers
Big news for Microsoft!
Microsoft and Salesforce have been battling it out for years. Conventional wisdom seemed to indicate that Microsoft, try as it might, would never gain the lead. After all, Salesforce created the Software as a Service (SaaS) model back in 1999 and Microsoft was a late entry into that market. But that wisdom didn’t take into account Microsoft’s dogged determination to be a winner.
That day has finally come and the tech community rubbed it in with headlines such as: “HEY SALESFORCE, HOW DOES IT FEEL TO BE #2?” and “Microsoft Seizes SaaS Lead From Salesforce” and “Microsoft surpasses pioneer Salesforce in enterprise software as a service revenue…”
Granted, it was a small lead with Microsoft garnering 15% of the SaaS marketing and Salesforce coming in a very close second with 14%. With only a 1% lead, the battle is sure to continue and the scales could tip the other way when the next set of numbers are released.
Here are some of the telltale numbers:
Microsoft’s 15% included Dynamics CRM Online, but the larger part of that number came from Office 365 and Live Meeting. And that’s okay because it’s in keeping with Satya Nadella’s plan which, from the moment he took over the reins as Microsoft’s CEO, was a holistic view of the SaaS market that did not revolve any one product. His vision was for Microsoft to be a “cloud-first and mobile-first” company. He understood that Collaboration was going to be more important than standalone CRM.
The second quarter (Q2) 2016 numbers bear that out. Collaboration accounted for 40% of the worldwide SaaS market. CRM accounted for 25% of that same market. Let’s not overlook ERP which comprised the largest share of the worldwide SaaS market at nearly 50%. Microsoft Dynamics ERP didn’t even figure into that number which was dominated by SAP, Oracle and NetSuite. However, Microsoft is vying for a strong place in that segment as well, with online versions of its Dynamics ERP product line and the October release of Dynamics 365, which could cause a seismic shift in the SaaS ERP space.
As legions of companies are moving their businesses to the Cloud, the worldwide SaaS market produced revenues of $11 billion in Q2 2016, a 33% year-over-year increase. The Collaboration segment grew 37% year-over-year. The ERP segment grew at a staggering 49% rate. The growth in both of those segments exceeded the growth of the SaaS market as whole. No one can ignore those numbers!
Perhaps the most telling of the Q2 telltale numbers was Microsoft’s overall growth rate of 70% in the SaaS market versus Salesforce at 21%. No doubt, Salesforce is taking heed and strategizing a comeback.
The Q3 2016 numbers will be awaited with bated breath throughout the tech world.
If you are interested in evaluating a market leader, Microsoft Dynamics CRM, contact AbleBridge, now a Crowe Horwarth company.
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By AbleBridge, Microsoft Dynamics CRM Gold Partner, now a Crowe Horwarth company. www.ablebridge.com
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