InsightaaS: We have observed in the past (for example, when we are highlighting research from one of teh Enterprise Irregulars) that independent software analysts are becoming the most important voices in the industry, supplanting analysts from established research companies. In today’s feature, we highlight the work of one such voice: Albert Pang, whose Apps Run the World “represents a new breed of IT market research organizations,” and has as its mission “to become the No. 1 source for applications research for any organization that has a vested interest in the $100-billion+ applications marketplace.” Apps Run the World is spinning off subject-specific sites, including Apps Run ERP, Apps Run Treasury, and the source of the piece that we are highlighting today, Apps Run the Cloud.
Apps Run the Cloud’s ranking of the world’s 500 largest cloud application vendors provides important input to the fact base surrounding our perception of SaaS. It sizes the cloud application market at $30 billion in 2013 growing to $67 billion in 2018 (CAGR of 17%), and provides context for these figures in a graphic included in the post which positions cloud vs. non cloud revenues from 2011 to 2018 (and which shows that while cloud revenue will increase at a CAGR of 17% from 2013-2018, license and maintenance revenue will actually contract 1% per year through this period – with the effect that cloud will double from 17% of total in 2013 to 33% in 2018).
The vendor list that follows provides the names of the top 25 cloud application vendors, their key markets, 2012 and 2013 cloud subscription revenues, 2013 growth rate and a thumbnail descriptions of major 2013 developments. The list is intriguing: it’s rare that a vendor ranking second by revenue can also demonstrate 200% growth at the same time, but Microsoft manages the feat, and SAP (third on the list) also logs triple-digit growth.
As an added bonus, this link will bring you to the full list of 500 vendors (though it only presents revenue, growth and share data for the top 50).
In 2013, the Cloud applications market soared 32% to hit $30.3 billion in Cloud subscription revenues, compared with $23 billion in the year-earlier period. The big gain came as a growing number of enterprise applications vendors switched gears by going after Cloud subscription sales in a concerted effort to boost their recurring revenues, sometimes at the expense of their conventional license and maintenance revenues.
The change of heart was inevitable as companies large and small companies embraced Cloud Computing as a clear alternative to on-premise implementations, reducing their IT infrastructure and support expenses along the way.
Adding to that momentum was the continuing expansion of Cloud-only applications vendors that have outpaced the growth of their counterparts in the on-premise world for three reasons.
First, since the end of the financial crisis, institutional investors — ranging from private equity firms to venture capitalists and public investors — have poured tens of billions of dollars into the Cloud applications market bankrolling a smattering of Cloud-only vendors in hopes of displacing the on-premise vendors…