In this Cloud Wars Minute, I share insights on the current heated competition between SAP and Salesforce, and what it means for customers.
Highlights
00:17 — There’s a very interesting competition going on between SAP and Salesforce to become the world’s largest applications vendor. For close to five decades, it was SAP, which really invented the enterprise applications category. Then Salesforce, about a year ago, for the first time, had quarterly revenue that exceeded SAP’s, and that’s what happened in the most recent quarter.
01:17 — If we look at the last 12 months, SAP takes the number one spot at $33.78 billion, compared to Salesforce’s $33.07 billion. While SAP’s cloud revenue is growing twice as fast as Salesforce, to about 23%; Salesforce’s will be 11%. The counterbalance for SAP is its declining on-prem business. It’s got to keep its lead in cloud growth rate.
02:20 — Who is going to be the biggest apps vendor in the world? And secondly, who is going to be the third largest overall enterprise software vendor including databases, platforms, and so forth behind Microsoft and Oracle?
03:00 — Over time, the choices and favorites of customers shift. Early on, it was all Amazon, it was all Salesforce — that has changed dramatically. SAP and Salesforce are about as close in their total revenue size as any two companies could be. I would not be surprised if there are some customers who look at this and say, “I want to go with the winner here.”
04:16 — Marc Benioff, the CEO of Salesforce, mentioned in the company’s earnings call last week on August 30 that Salesforce has become the world’s third-largest software vendor. So, there are some bragging rights to be had here.
