First Take on 2018 Cloud ERP Applications Market With Oracle Leading the Pack

A year of robust growth in Cloud ERP adoptions amid thousands of digital transformation implementations

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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.

RankVendor2017 Cloud ERP Revenues, $M2018 Projected Cloud ERP Revenues, $M2018 Projected Market Share, %Growth, %Key Cloud ERP ApplicationsNumber of Cloud ERP CustomersKey Vertical
1Oracle Subscribe Subscribe Subscribe30%Oracle ERP Cloud, NetSuite ERP22000Enterprise
2athenahealth Subscribe Subscribe Subscribe10%Athenahealth EHR111000Healthcare
3RealPage Subscribe Subscribe Subscribe33%RealPage OneSite12500Real Estate
4Intuit Subscribe Subscribe Subscribe51%QuickBooks Online3.6 million subscribersAccounting
5Infor Subscribe Subscribe Subscribe19%Infor Cloud Suite9000Enterprise
6SAP Subscribe Subscribe Subscribe20%S/4HANA Cloud, Business ByDesign8000Enterprise
7Blackbaud Subscribe Subscribe Subscribe14%Financial Edge, Raiser’s Edge35000Non-profit
8Workday Subscribe Subscribe Subscribe35%Workday Financial Management550Enterprise
9Xero Subscribe Subscribe Subscribe40%Xero ERP1.6 millionAccounting
10Sage Subscribe Subscribe Subscribe30%Sage Intacct, Sage Business Cloud12000Accounting
Subtotal Subscribe Subscribe Subscribe26%
Other Subscribe Subscribe Subscribe54%
Total Subscribe Subscribe Subscribe40%

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.

CustomerIndustryEmpl.RevenueCountryVendorNew Product
Community Health Center of LubbockHealthcare141$20.0MUnited StatesBlackbaudBlackbaud Financial Edge NXT
The Vista SchoolEducation110$10.0MUnited StatesBlackbaudBlackbaud Financial Edge NXT
Watami CoRetail2825$843.0MJapanInforInfor CloudSuite Food & Beverage
Mattex GroupManufacturing800$120.0MUnited Arab EmiratesInforInfor CloudSuite Fashion
CHRISTUS HealthHealthcare33000$4.92BUnited StatesInforInfor CloudSuite Healthcare
XometryManufacturing140$20.0MUnited StatesInforInfor CloudSuite Industrial (Syteline)
Capital Region Medical Center (CRMC)Healthcare1600$200.0MUnited StatesInforInfor CloudSuite Healthcare
The CSL Group IncTransportation1000$250.0MCanadaOracleOracle ERP Cloud
ArcadisConstruction and Real Estate27000$3.40BNetherlandsOracleOracle ERP Cloud
UnilabLife Sciences6000$1.10BPhilippinesOracleNetSuite OneWorld
Sunmoon Food CompanyConsumer Packaged Goods700$45.0MSingaporeOracleNetSuite OneWorld
West Midlands PoliceInsurance10884$728.0MUnited KingdomOracleOracle ERP Cloud
Adventist HealthHealthcare35000$3.60BUnited StatesOracleOracle ERP Cloud
athenahealthProfessional Services4668$924.0MUnited StatesOracleOracle ERP Cloud
Caesars EntertainmentLeisure and Hospitality65000$4.85BUnited StatesOracleOracle ERP Cloud
Kentucky State UniversityEducation1600$53.0MUnited StatesOracleOracle ERP Cloud
San Bernardino Community College DistrictEducation14253$12.37BUnited StatesOracleOracle ERP Cloud
UW HealthHealthcare18000$2.90BUnited StatesOracleOracle ERP Cloud
ProphetProfessional Services550$30.0MUnited StatesOracleNetSuite OneWorld Professional Services Automation
Bankrate, IncBanking and Financial Services384$434.0MUnited StatesOracleNetSuite OneWorld
Veolia ANZProfessional services4000$1.10BAustraliaSAPSAP S/4 HANA
StocklandConstruction and Real Estate1440$2.60BAustraliaSAPSAP S/4 HANA
Delaware InternationalProfessional services1800$263.0MBelgiumSAPSAP S/4 HANA
KENGEEConsumer Packaged Goods3000$500.0MChinaSAPSAP S/4 HANA
Chimelong Group Co. Ltd.Leisure and Hospitality10000$950.0MChinaSAPSAP S/4 HANA
HMD Global OyManufacturing600$2.06BFinlandSAPSAP Business ByDesign
SchnelleckeDistribution19000$1.20BGermanySAPSAP S/4 HANA
StepStoneProfessional Services900$262.0MGermanySAPSAP Business ByDesign
Waberer’s International NyrtDistribution7600$675.0MHungarySAPSAP S/4 HANA
Vectus Industries LimitedConstruction and Real Estate1300$75.0MIndiaSAPSAP S/4 HANA
Salvatore FerragamoConsumer Packaged Goods4000$1.39BItalySAPSAP S/4 HANA
ABeamConsumer Packaged Goods4961$660.0MJapanSAPSAP S/4 HANA
MINISO Co. Ltd.Retail10000$1.80BJapanSAPSAP S/4 HANA
APG Groep N.V.Banking and Financial Services4000$1.20BNetherlandsSAPSAP S/4 HANA
Ballance Agri-NutrientsRetail728$547.0MNew ZealandSAPSAP S/4 HANA
Indus Motor CompanyAutomotive3200$1.05BPakistanSAPSAP S/4 HANA
Choví Food GroupConsumer Packaged Goods135$45.9MSpainSAPSAP S/4 HANA
JTIConsumer Packaged Goods40000$10.50BSwitzerlandSAPSAP S/4 HANA
PentiRetail3000$600.0MTurkeySAPSAP S/4 HANA
The Emirates GroupTransportation103363$27.88BUnited Arab EmiratesSAPSAP S/4 HANA
Arm LimitedProfessional services6250$1.35BUnited KingdomSAPSAP S/4 HANA
Quorn FoodsConsumer Packaged Goods650$100.0MUnited KingdomSAPSAP S/4 HANA
Transport for LondonTransportation23478$2.00BUnited KingdomSAPSAP S/4 HANA
CentricaUtility60000$36.50BUnited KingdomSAPSAP S/4 HANA
Liberty Speciality MarketsInsurance1700$200.0MUnited KingdomSAPSAP S/4 HANA
Northern Gas NetworksUtility2658$200.0MUnited KingdomSAPSAP S/4 HANA
pladis GlobalConsumer Packaged Goods26000$6.00BUnited KingdomSAPSAP S/4 HANA
Scotts Miracle-Gro CompanyConsumer Packaged Goods5500$2.80BUnited KingdomSAPSAP S/4 HANA
Berry Bros. & RuddConsumer Packaged Goods450$100.0MUnited KingdomSAPSAP S/4 HANA
De La RueDistribution3500$603.0MUnited KingdomSAPSAP Business ByDesign
The Coca-Cola CompanyConsumer Packaged Goods61800$35.41BUnited StatesSAPSAP S/4 HANA
Moderna TherapeuticsLife Sciences600$910.0MUnited StatesSAPSAP S/4 HANA
MicrosoftProfessional services131300$110.00BUnited StatesSAPSAP S/4 HANA
doTERRARetail2300$1.50BUnited StatesSAPSAP S/4 HANA
Point Loma Nazarene UniversityEducation1250$300.0MUnited StatesWorkdayWorkday Financial Management
ZillowConstruction and Real Estate3334$1.08BUnited StatesWorkdayWorkday Financial Management
Caliber CollisionAutomotive2800$1.20BUnited StatesWorkdayWorkday Financial Management
Care.comProfessional Services600$146.0MUnited StatesWorkdayWorkday Financial Management
Denny’sLeisure and Hospitality8900$529.0MUnited StatesWorkdayWorkday Financial Management
Best Western Hotels & ResortsLeisure and Hospitality5000$7.00BUnited StatesWorkdayWorkday Financial Management
The Ohio State UniversityEducation30000$4.00BUnited StatesWorkdayWorkday Financial Management

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