Microsoft leads the SaaS market in Q2 2017 – ahead of Salesforce, Adobe, Oracle and SAP, according to Synergy Research Group.
The acquisition of professional networking website LinkedIn has prompted Microsoft to enhance presence in the global SaaS market.
Enterprise SaaS market increased 31 percent to almost $15 billion in the second quarter of 2017, with collaboration being the highest growth segment.
Microsoft had replaced long-time SaaS market leader Salesforce a year ago.
Microsoft was already rapidly growing its SaaS revenues, but its acquisition of LinkedIn gave its SaaS business a further boost in Q2.
Adobe, Oracle and SAP are behind Microsoft and Salesforce. Other leading SaaS companies include ADP, IBM, Workday, Intuit, Cisco, Google and ServiceNow.
Oracle, Microsoft and Google achieved the highest overall growth rates in the SaaS market.
Spending on SaaS remains relatively small compared to on-premise software. The SaaS market will double in size over the next three years, with strong growth across all segments and all geographic regions.
“IaaS and PaaS markets tend to get more attention and are indeed growing more rapidly, but the SaaS market is substantially bigger and will remains so for many years,” said John Dinsdale, chief analyst and research director at Synergy Research Group.
Traditional enterprise software vendors like Microsoft, SAP, Oracle and IBM still have a huge base of on-premise software customers and they are pushing to aggressively convert those customers to a SaaS-based consumption model.
Cloud software vendors like Workday, Zendesk and ServiceNow are helping to propel enterprise spending on SaaS.