This year’s Cloud Top 500 report highlights another salient fact in the applications marketplace – change is the name of the game.
With the market posting another double-digit gain in 2016, this year’s Cloud Top 500 vendors represent old guards such as Salesforce, Microsoft, SAP, Oracle and Adobe – all retaining their exact position as in 2015 or even 2013 when we released Cloud Top 500 for the first time.
There are also up and comers like Dropbox, Shopify, Infor and Open Text that zoomed to be among the Top 25 Cloud applications vendors as a result of their organic growth, recent acquisitions, or both over the past year. FIS Global, Intuit, Google, and LogMeIn didn’t make the Top 25 in 2013. Since that time, these four vendors have gained ground among the Top 25.
Since 2013, the Cloud applications market – driven in part by names like Concur, NetSuite, Constant Contact, and LinkedIn – has gone through a wave of mergers and acquisitions as these brands were picked up by the likes of SAP, Oracle, Endurance, and Microsoft, respectively.
Over the past few years, the Cloud applications market has almost doubled in size from $30 billion in 2013 to $57 billion in 2016 and some of the vendors have outpaced the market by a wide margin.
Exhibit 1 lists Top 25 Cloud Applications Vendors by their Cloud revenue growth since 2013.
| Fastest Growth Among Top 25 Cloud Apps Vendors Since 2013 | 2013-2016 Growth, % |
|---|---|
| ServiceNow | 527% |
| Workday | 283% |
| SAP | 216% |
| Oracle | 214% |
| Microsoft | 196% |
| Adobe Systems | 97% |
| Ultimate Software | 96% |
| athenahealth | 84% |
| Salesforce | 74% |
| IBM | 71% |
| RealPage | 67% |
| Cisco | 63% |
| Citrix | 37% |
| Digital Insight | 24% |
Source: Apps Run The World, December 2017
Salesforce Leads Cloud Top 500
In 2016, Salesforce led the Cloud applications market with continuous success in the customer relationship management space, outflanking a whole host of competitors by scoring a 22% growth to reach $6.3 billion in Cloud subscription revenues.
Salesforce’s share in 2016 was 11%, not too much different from that of 2013 when it had a 12% share, while the overall market almost doubled in size. That underscores the fact that Salesforce has been effective in exerting control over the market following its acquisitions of ExactTarget in 2013 and Demandware last year, shoring up its Marketing Cloud offerings. The 2016 acquisition for Quip, which aims to reimagine and improve how desktop and mobile users handle documents and workflow for specific industries, projects and collaborative functions, is Salesforce’s latest attempt to disrupt the Cloud application market beyond the confines of CRM.
Quip’s former head Bret Taylor has been named President and Chief Product Officer, an appointment that could presage a wave of new applications designed to sustain Salesforce’s growth through the end of the decade as the vendor aims to become the first $20-billion Cloud applications company.
Filling the product pipeline is one thing, sustaining Salesforce’s 20%+ growth through 2021 is something else altogether given the increased competition from Microsoft and others. Much of that will depend on migrating most of its 150,000 customers to the new Lightning UI from their current Classic platform, a move that would make it easier for them to take advantage of innovations like Einstein for artificial intelligence and myIOT for Internet of Things implementations. At its recent Dreamforce conference, much of the floor space was devoted to drive the migration by transforming legions of Salesforce Administrators to Lightning or Trailhead developers, the latter as another way to boost their productivity through hands-on learning, modules, projects and toolkits.
If Salesforce succeeds, it could dwarf the reach of Oracle Java or Microsoft Dot Net by creating a super community of everyday Salesforce developers that could take the vendor and its Cloud apps to new heights.
Exhibit 2 lists the Top 25 Cloud Applications Vendors, Their Growth, 2016 Shares, and Recent Developments.
| Rank | Top 25 Cloud Apps Vendors | 2015 Cloud Applications Revenues, $M | 2016 Cloud Applications Revenues, $M | 2016 Cloud Applications Revenues YoY, % | 2016 Cloud Market Share, % | Recent Developments |
|---|---|---|---|---|---|---|
| 1 | Salesforce | 5171 | 6315 | 22% | 11% | Aims to be the first to post $20B in Cloud sales |
| 2 | Microsoft | 2959 | 4020 | 36% | 7% | Acquired LinkedIn to expand its Cloud reach |
| 3 | SAP | 2568 | 3235 | 26% | 6% | SAP banks on Ariba, Concur, SuccessFactors and S/4 HANA for Cloud growth |
| 4 | Oracle | 2001 | 3211 | 60% | 6% | Oracle and NetSuite now dominate Cloud ERP |
| 5 | Adobe Systems | 1405 | 1775 | 26% | 3% | Digital Media segment to post 23% growth in FY2018. |
| 6 | FIS Global | 1320 | 1452 | 10% | 3% | Integration of SunGard Financials into FIS Global was in full swing in 2017. |
| 7 | Workday | 920 | 1291 | 40% | 2% | Workday continued expanding its customer count after signing more than 1900 customers – mostly for its HCM products – in 2017. |
| 8 | ServiceNow | 765 | 1097 | 43% | 2% | In 2017, ServiceNow acquired DXContinuum for its machine learning technology and Qlue for its artificial intelligence and virtual assistant technologies. |
| 9 | athenahealth | 723 | 845 | 17% | 1% | Acquired Praxify for machine learning and natural language processing technologies for healthcare providers. |
| 10 | Intuit | 570 | 728 | 28% | 1% | Intuit has sharpened its focus on QuickBooks after divesting noncore products. |
| 11 | IBM | 661 | 727 | 10% | 1% | IBM Watson serves as the brain behind its Cloud and Cognitive Computing strategy. |
| 12 | 495 | 700 | 41% | 1% | Extends collaboration tools to address other functional areas like HR. | |
| 13 | Ultimate Software | 516 | 654 | 27% | 1% | In 2017, Ultimate Software leveraged the AI technology it acquired from Kanjoya to optimize and drive employee performance and engagement. |
| 14 | LogMeIn | 480 | 559 | 16% | 1% | Beginning to integrate collaboration products it acquired from Citrix. |
| 15 | RealPage | 451 | 543 | 20% | 1% | Real Page turns property management into a juggernaut in real-estate vertical. |
| 16 | Dropbox | 350 | 462 | 32% | 1% | Expanding into a new 736,000 square-foot corporate headquarters in San Francisco in 2019. |
| 17 | Cisco | 399 | 440 | 10% | 1% | Applications are bright spot among otherwise sluggish recovery in core business. |
| 18 | Veeva | 316 | 434 | 37% | 1% | After dominating Cloud CRM in life sciences, Veeva now eyes contract research organizations with Randomization and Trial Supply Management through its Veeva Vault EDC. |
| 19 | ACI Worldwide | 446 | 411 | -8% | 1% | ACI secures a niche in real-time payments. |
| 20 | Citrix | 366 | 400 | 9% | 1% | Much of collaboration revenues has been spun off to LogMeIn. |
| 21 | Shopify | 205 | 389 | 90% | 1% | Shopify now powers 500,000 online stores and $46B worth of eCommerce transactions. |
| 22 | Box Inc. | 288 | 380 | 32% | 1% | Unveiled Box Skills: A framework for applying machine learning tools such as computer vision, video indexing and sentiment analysis to content stored in Box. |
| 23 | Infor | 202 | 376 | 86% | 1% | Over the past year, Infor has invested heavily in analytics by buying Cloud BI vendor Birst for $105 million after spending $126 million for Predictx for retail analytics. |
| 24 | Open Text | 270 | 374 | 39% | 1% | Acquired Covisint for emarketplace and EMC Documentum in 2017. |
| 25 | Digital Insight/NCR | 356 | 360 | 1% | 1% | Digital Insight banks on online banking for both B2C and B2B clients. |
| Subtotal | 24203 | 31178 | 29% | 55% | ||
| Other | 23127 | 25722 | 11% | 45% | ||
| Total | 47330 | 56900 | 20% | 100% |
Source: Apps Run The World, December 2017
As our last report suggests, the Cloud applications market is projected to reach $86 billion in Cloud subscription revenues through 2021, much of the heavy lifting will have to be made at the local level.
In Australia, life insurance and wealth management provider Clearview is in the midst of rolling out Oracle ERP Cloud, replacing its PeopleSoft system.
In Brazil, Itaú Unibanco is investing heavily in shared ledger technologies, a move that will change how the local banking industry operates.
In Canada, the Royal Bank of Canada plans to widely deploy blockchain technology to improve functionality for its loyalty program, while executing at least 60% of all financial transactions through digital and mobile channels.
In Italy, Edison Italy SpA is in the midst of a digital transformation project to better manage its gas and power businesses.
All these examples are clear indicators of companies in different countries putting digital transformation projects in action and Cloud-based applications will play a key role behind them.
Over the past 12 months, our researchers have been gathering Cloud adoption data at the country level and we encourage you to learn more by subscribing to our premium content, which covers the entire Enterprise Applications Market split by 45 countries and where the top vendors – among the more than 1,200 software providers in this year’s survey – stack up against each other in any of these countries. The granular data cuts also include the top enterprise applications vendors by country, the top Cloud applications vendors by country and the top HCM applications vendors by country.
Exhibit 3 Details 2016 Cloud Applications Market By Country.
Further Readings
Our latest market-sizing reports profile the top 10 vendors in each of the 37 markets (see Taxonomy here), offering in-depth analysis of the market dynamics, vendors’ Strengths, Customers, Opportunities, Risks and Ecosystems as well as their ability to gain Shares (SCORES) within their respective space. We also track their successes in the Cloud by breaking down their latest on-premise and Cloud applications revenues. Another metric that we use is win-loss analysis of the quarterly wins of these top vendors and whether incumbents and Cloud upstarts pose any real threat to their standing amid shifting market requirements and user preferences.
