Preliminary results show the Cloud ERP applications market is on pace to expand significantly in 2018 with a growing number of customers adopting Cloud-native back-office software for the first time, or in many cases upgrading and replacing their on-premise systems with the latest Cloud releases as their digital transformation initiatives gather momentum.
Based on the current run-rate of the top 10 Cloud ERP applications vendors and recent customer purchases of these mission-critical products for finance and operations management, ARTW is projecting the market to soar 40% to reach more than $17 billion in Cloud subscription revenues for 2018.
Top 10 Cloud ERP Software Vendors and Market Forecast
Buoyed by Oracle ERP Cloud and NetSuite ERP cloud applications, Oracle is expected to clinch the No. 1 spot with about 10% share in the Cloud ERP market, as shown in Table 1.
|Rank||Vendor||2017 Cloud ERP Revenues, $M||2018 Projected Cloud ERP Revenues, $M||2018 Projected Market Share, %||Growth, %||Key Cloud ERP Applications||Number of Cloud ERP Customers||Key Vertical|
|1||Oracle||Subscribe||Subscribe||Subscribe||30%||Oracle ERP Cloud, NetSuite ERP||22000||Enterprise|
|3||RealPage||Subscribe||Subscribe||Subscribe||33%||RealPage OneSite||12500||Real Estate|
|4||Intuit||Subscribe||Subscribe||Subscribe||51%||QuickBooks Online||3.6 million subscribers||Accounting|
|5||Infor||Subscribe||Subscribe||Subscribe||19%||Infor Cloud Suite||9000||Enterprise|
|6||SAP||Subscribe||Subscribe||Subscribe||20%||S/4HANA Cloud, Business ByDesign||8000||Enterprise|
|7||Blackbaud||Subscribe||Subscribe||Subscribe||14%||Financial Edge, Raiser’s Edge||35000||Non-profit|
|8||Workday||Subscribe||Subscribe||Subscribe||35%||Workday Financial Management||550||Enterprise|
|9||Xero||Subscribe||Subscribe||Subscribe||40%||Xero ERP||1.6 million||Accounting|
|10||Sage||Subscribe||Subscribe||Subscribe||30%||Sage Intacct, Sage Business Cloud||12000||Accounting|
Source: Apps Run The World, 2018
The leadership position coincides with Oracle’s securing more than 22,000 Cloud ERP customers including nearly 6,000 for Oracle ERP Cloud and 16,000 for NetSuite. In its most recent quarter ended November 30, Oracle’s ERP and HCM applications reached annualized SaaS revenues of $2.6 billion, up more than 25%, said CEO Mark Hurd during the earnings call.
Each quarter Oracle is migrating at least 200 customers of its on-premise ERP systems like E-Business Suite to the Cloud. Furthermore, Oracle’s SaaS net bookings of high 30% in 2QFY19 were the highest for a three-month period that was not its fourth quarter, traditionally its biggest selling window, Hurd said.
What it boils down is the fact that Oracle’s Cloud ERP strategy is resonating with its existing customers and prospects including new Cloud ERP wins at MGM Resorts, Indiana University Health Center, Johnson Controls, Securitas, and Toyota Europe during its most recent quarter.
Based on our Buyer Insights Database, of the 2,300 customers pursuing digital transformation initiatives, Oracle products are featured 292 times, or 13% of total. Among these 292 digital transformation projects using Oracle products, Cloud ERP accounts for more than one-third of such implementations. See below for samples of digital transformation projects using Cloud ERP applications. You can read the continuously updated catalog of these use cases in our Customer Database section.
Oracle is not the only one benefitting from customers accelerating their migration to the Cloud. Intuit, Xero and Sage are all experiencing a strong interest among customers wanting to adopt Cloud ERP for the first time, or migrating from their existing systems whether they come from the same vendor or one of their rivals. QuickBooks Online subscribers – many of whom are small and midsized companies – running the Cloud-based accounting system from Intuit now top 3.6 million, up from 1.6 million two years ago. On the other hand, QuickBooks Desktop unit sales have been dropping from 183,000 to 114,000 during the same period.
SAP also announced growing adoptions of its Cloud-based S/4HANA systems. For example, Shell has gone live on S/4HANA Cloud during its latest quarter, while CPFL, Delaware International, Keytree and The Emirates Group have all adopted its S/4HANA Cloud applications, according to our Buyer Insights Database.
In terms of the outlook, the Cloud ERP market will see stiffening competition in 2019 as the incumbents reposition themselves and the upstarts become more aggressive in delivering a full suite of ERP applications.
For example, athenahealth, the No. 2 vendor specializing in Cloud-based EHR systems and practice management systems for physicians and healthcare providers, is going private following its $5.7-billion purchase by Veritas Capital and Evergreen Coast Capital, a subsidiary of Elliott Management. athenahealth, now with former GE CEO Jeff Immelt as the chairman, could benefit from its new owner Veritas’ April 2018 purchase of GE Healthcare assets by migrating those GE customers to the Cloud.
Workday, in the meantime, is parlaying its successes in the Cloud HCM market to Cloud ERP with its Workday Financial Management as well as its $1.6 billion purchase of Adaptive Insights for enterprise performance management earlier this year. Migrating some of 3,800 customers of Adaptive to a full suite of Cloud ERP will be among its top priorities.
Similarly, upstarts like Acumatica, FinancialForce, Plex and Zoho are all investing heavily to build out their Cloud ERP offerings, while going up market by expanding their presence among some of the biggest ERP users in the world as their systems are scalable and robust enough to handle their demanding requirements.
A clear motivation is that despite its projected explosive growth in 2018, Cloud ERP still has plenty of runway to take off. Based on our latest Cloud Top 500 survey, the Cloud ERP market accounts for about 20% of the overall ERP Financial Management and ERP Services Operations Management market, which is projected to top $85 billion in 2018.
Digital First 500 research project is the industry’s most comprehensive repository that documents the world’s 500 foremost and visionary organizations as they pursue a range of digital transformation initiatives. The goal of the project is to recognize their vision, trials, and tribulations along with their achievements before a global audience.
|Community Health Center of Lubbock||Healthcare||141||$20.0M||United States||Blackbaud||Blackbaud Financial Edge NXT|
|The Vista School||Education||110||$10.0M||United States||Blackbaud||Blackbaud Financial Edge NXT|
|Watami Co||Retail||2825||$843.0M||Japan||Infor||Infor CloudSuite Food & Beverage|
|Mattex Group||Manufacturing||800||$120.0M||United Arab Emirates||Infor||Infor CloudSuite Fashion|
|CHRISTUS Health||Healthcare||33000||$4.92B||United States||Infor||Infor CloudSuite Healthcare|
|Xometry||Manufacturing||140||$20.0M||United States||Infor||Infor CloudSuite Industrial (Syteline)|
|Capital Region Medical Center (CRMC)||Healthcare||1600||$200.0M||United States||Infor||Infor CloudSuite Healthcare|
|The CSL Group Inc||Transportation||1000||$250.0M||Canada||Oracle||Oracle ERP Cloud|
|Arcadis||Construction and Real Estate||27000||$3.40B||Netherlands||Oracle||Oracle ERP Cloud|
|Unilab||Life Sciences||6000||$1.10B||Philippines||Oracle||NetSuite OneWorld|
|Sunmoon Food Company||Consumer Packaged Goods||700||$45.0M||Singapore||Oracle||NetSuite OneWorld|
|West Midlands Police||Insurance||10884||$728.0M||United Kingdom||Oracle||Oracle ERP Cloud|
|Adventist Health||Healthcare||35000||$3.60B||United States||Oracle||Oracle ERP Cloud|
|athenahealth||Professional Services||4668||$924.0M||United States||Oracle||Oracle ERP Cloud|
|Caesars Entertainment||Leisure and Hospitality||65000||$4.85B||United States||Oracle||Oracle ERP Cloud|
|Kentucky State University||Education||1600||$53.0M||United States||Oracle||Oracle ERP Cloud|
|San Bernardino Community College District||Education||14253||$12.37B||United States||Oracle||Oracle ERP Cloud|
|UW Health||Healthcare||18000||$2.90B||United States||Oracle||Oracle ERP Cloud|
|Prophet||Professional Services||550||$30.0M||United States||Oracle||NetSuite OneWorld Professional Services Automation|
|Bankrate, Inc||Banking and Financial Services||384||$434.0M||United States||Oracle||NetSuite OneWorld|
|Veolia ANZ||Professional services||4000||$1.10B||Australia||SAP||SAP S/4 HANA|
|Stockland||Construction and Real Estate||1440||$2.60B||Australia||SAP||SAP S/4 HANA|
|Delaware International||Professional services||1800||$263.0M||Belgium||SAP||SAP S/4 HANA|
|KENGEE||Consumer Packaged Goods||3000||$500.0M||China||SAP||SAP S/4 HANA|
|Chimelong Group Co. Ltd.||Leisure and Hospitality||10000||$950.0M||China||SAP||SAP S/4 HANA|
|HMD Global Oy||Manufacturing||600||$2.06B||Finland||SAP||SAP Business ByDesign|
|Schnellecke||Distribution||19000||$1.20B||Germany||SAP||SAP S/4 HANA|
|StepStone||Professional Services||900||$262.0M||Germany||SAP||SAP Business ByDesign|
|Waberer’s International Nyrt||Distribution||7600||$675.0M||Hungary||SAP||SAP S/4 HANA|
|Vectus Industries Limited||Construction and Real Estate||1300||$75.0M||India||SAP||SAP S/4 HANA|
|Salvatore Ferragamo||Consumer Packaged Goods||4000||$1.39B||Italy||SAP||SAP S/4 HANA|
|ABeam||Consumer Packaged Goods||4961||$660.0M||Japan||SAP||SAP S/4 HANA|
|MINISO Co. Ltd.||Retail||10000||$1.80B||Japan||SAP||SAP S/4 HANA|
|APG Groep N.V.||Banking and Financial Services||4000||$1.20B||Netherlands||SAP||SAP S/4 HANA|
|Ballance Agri-Nutrients||Retail||728||$547.0M||New Zealand||SAP||SAP S/4 HANA|
|Indus Motor Company||Automotive||3200||$1.05B||Pakistan||SAP||SAP S/4 HANA|
|Choví Food Group||Consumer Packaged Goods||135||$45.9M||Spain||SAP||SAP S/4 HANA|
|JTI||Consumer Packaged Goods||40000||$10.50B||Switzerland||SAP||SAP S/4 HANA|
|Penti||Retail||3000||$600.0M||Turkey||SAP||SAP S/4 HANA|
|The Emirates Group||Transportation||103363||$27.88B||United Arab Emirates||SAP||SAP S/4 HANA|
|Arm Limited||Professional services||6250||$1.35B||United Kingdom||SAP||SAP S/4 HANA|
|Quorn Foods||Consumer Packaged Goods||650||$100.0M||United Kingdom||SAP||SAP S/4 HANA|
|Transport for London||Transportation||23478||$2.00B||United Kingdom||SAP||SAP S/4 HANA|
|Centrica||Utility||60000||$36.50B||United Kingdom||SAP||SAP S/4 HANA|
|Liberty Speciality Markets||Insurance||1700||$200.0M||United Kingdom||SAP||SAP S/4 HANA|
|Northern Gas Networks||Utility||2658||$200.0M||United Kingdom||SAP||SAP S/4 HANA|
|pladis Global||Consumer Packaged Goods||26000||$6.00B||United Kingdom||SAP||SAP S/4 HANA|
|Scotts Miracle-Gro Company||Consumer Packaged Goods||5500||$2.80B||United Kingdom||SAP||SAP S/4 HANA|
|Berry Bros. & Rudd||Consumer Packaged Goods||450||$100.0M||United Kingdom||SAP||SAP S/4 HANA|
|De La Rue||Distribution||3500||$603.0M||United Kingdom||SAP||SAP Business ByDesign|
|The Coca-Cola Company||Consumer Packaged Goods||61800||$35.41B||United States||SAP||SAP S/4 HANA|
|Moderna Therapeutics||Life Sciences||600||$910.0M||United States||SAP||SAP S/4 HANA|
|Microsoft||Professional services||131300||$110.00B||United States||SAP||SAP S/4 HANA|
|doTERRA||Retail||2300||$1.50B||United States||SAP||SAP S/4 HANA|
|Point Loma Nazarene University||Education||1250||$300.0M||United States||Workday||Workday Financial Management|
|Zillow||Construction and Real Estate||3334||$1.08B||United States||Workday||Workday Financial Management|
|Caliber Collision||Automotive||2800||$1.20B||United States||Workday||Workday Financial Management|
|Care.com||Professional Services||600||$146.0M||United States||Workday||Workday Financial Management|
|Denny’s||Leisure and Hospitality||8900||$529.0M||United States||Workday||Workday Financial Management|
|Best Western Hotels & Resorts||Leisure and Hospitality||5000||$7.00B||United States||Workday||Workday Financial Management|
|The Ohio State University||Education||30000||$4.00B||United States||Workday||Workday Financial Management|