Following outstanding performances in the cloud throughout 2022, three so-called “legacy” vendors — Oracle, SAP, and IBM — have all moved up on the Cloud Wars Top 10 while two cloud natives — Salesforce and ServiceNow — have slipped in the weekly rankings.
Here’s a summary of these big-times changes to the Cloud Wars Top 10, now in its seventh year of analyzing and stacking the world’s largest and most influential cloud providers:
| Cloud Wars Top 10 company | Previous Rank | New Rank |
| Salesforce | 4 | 6 |
| Oracle | 5 | 4 |
| SAP | 6 | 5 |
| ServiceNow | 7 | 10 |
| IBM | 10 | 7 |
The moves reflect superb transformations within 45-year-old Oracle, 50-year-old SAP, and 112-year-old IBM as each of those companies had to:
- revise its products and technologies to meet the cloud-centric needs of customers
- overhaul its go-to-market programs to align with that new mindset among customers
- reorganize its sales, support, and marketing teams to reflect that new reality
- develop innovative new approaches to solve the modern digital challenges customers are facing
- strengthen and expand its global partners ecosystem; and
- do all this while battling — and in many cases beating — ravenous and extremely capable competitors
Since every action has an equal and opposite reaction, the ascendancy of Oracle, SAP, and IBM was counterbalanced by the falling fortunes in the Cloud Wars Top 10 by Salesforce and ServiceNow.
The reasons behind the downward moves for those two companies are radically different.
Salesforce Falls from #4 to #6
For Salesforce, it was a series of shocking revelations that came out in its fiscal Q3 earnings call on Nov. 30.
- While the company’s growth rate had not dropped below 20% for many years, it tumbled to 14% for the quarter that ended Oct. 31
- Co-CEO Bret Taylor’s decision to announce his imminent departure just 12 months after taking that high-profile job suggests significant problems within the company on strategic direction, product strategy, competitive challenges, and more
- Slack CEO Stewart Butterfield’s decision to announce his desire to leave right on the heels of Taylor’s announcement raises questions about the company’s fastest-growing business unit; and
- Benioff’s recent comments about the lower productivity of remote workers run directly counter to comments he’s made over the past two-and-a-half years about how the pandemic changed “everything,” particularly the antiquated notion of people traveling to headquarters offices to do their jobs
ServiceNow Falls from #7 to #10
Being part sentimental squish, I’ll admit I can be charmed by a heartfelt rallying cry. And CEO Bill McDermott’s vision for ServiceNow to be the “defining software company of the 21st century” has a lot of feel-good charm to it.
But while I’m not sure exactly where “charm” falls on the priority lists of the business executives among ServiceNow’s customers and prospects, I suspect it’s somewhere south of #50 or perhaps even #75. So, while I applaud McDermott’s overall performance in reshaping and repositioning ServiceNow, and in driving very solid levels of growth in his three years as CEO, the company is gliding toward no-man’s land because it’s trying to create a new and standalone category in a market with limited appetite for such singularity.
Is it an applications company? No, not really, although it does create some applications and helps customers create their own.
So then is it a platform company? Well, yes, but a very different type of platform company – all the other platform vendors have some big assets in place that can be leveraged by their platforms:
- That’s what Microsoft does in a variety of ways, but particularly with Power Platform
- Google Cloud does it with its fast-growing database business
- Oracle does it in many ways but particularly Oracle Database and the fast-growing Autonomous Database
- SAP has its high-growth Business Technology Platform
- IBM’s Red Hat is becoming extremely popular in hybrid cloud platforms, which is a vast opportunity
- Workday Extend enables customers and partners to build on its HCM and Financials apps
- And Snowflake has begun using its Data Cloud as a terrific platform for customers and partners to build upon
So — it’s become unclear to me how and why “the platform of platforms” will drive huge change and transformation for customers at a time when they have so many excellent alternatives from cloud providers they already work with in very vital ways.
The New Cloud Wars Top 10
- Microsoft
- Amazon
- Google Cloud
- Oracle (was #5)
- SAP (was #6)
- Salesforce (was #4)
- IBM (was #10)
- Workday
- Snowflake
- ServiceNow (was #7)
Oracle: 3 Reasons It Jumped to #4
- The past two quarters, its cloud-revenue growth rate has been 45% and 43%
- Its passionate and wide-ranging commitment to automate the entire healthcare industries in ways no other tech vendor is even approaching
- Its fearless and successful assault on “The 3 Hyperscalers” for cloud infrastructure that has turned that into a four-way contest
SAP: 3 Reasons It Jumped to #5
- Its cloud-revenue growth rate for the past two quarters has been 34% and 38%
- Its S/4HANA Cloud growth rate has been between 80% and 100%, with no signs of moderating
- Its RISE go-to-market program is pushing the entire Cloud Wars Top 10 to re-imagine how those companies work with customers undergoing profound business transformation
IBM: 3 Reasons It Jumped to #7
- Its cloud business will do well over $20 billion in calendar 2022, and its growth rate has been tracking nicely upwards over the past few quarters. Can it hit 20% in 2023?
- IBM is fusing artificial intelligence (AI) with cloud as broadly and effectively as any company in the Cloud Wars Top 10
- In the past 33 months, CEO Arvind Krishna has done a superb job of remaking IBM into an externally focused business whose component pieces are no longer battling each other but are instead coming together to drive new levels of innovation and opportunity for their customers
Final Thoughts
Congratulations to Oracle, SAP, and IBM for defying the doomsayers and, much more importantly, dazzling their customers!
And to Salesforce and ServiceNow: The challenge for 2023 is whether you can keep up with the wildly reinvigorated “old timers” that have just vaulted past you!
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