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From a revenue perspective, SaaS ecosystems went from being 6% of the enterprise software market in 2010 to 29% in 2018, a whopping $150 Billion.Īll that growth, however, hid a dirty little secret – profitability declined by half, and while the dominant platform-as-a-service providers (AWS, GCP, Azure) saw increased market share, the inevitable commoditization kicked in for the application guys. The Inevitable CommoditizationĪccording to McKinsey, between 20, the market capitalization of the global software industry grew at 2x the rate of the general market. Even SMBs that have traditionally lagged in the adoption of new technology are now indicating that they will run as much as 70% of their workloads and data in the Cloud within the next 12 months, no doubt spurred in part by the COVID-19 crisis. The recent Flexera State of the Cloud 2020 report indicates that irrespective of the size of the enterprise, 96% percent of respondents utilize at least one public cloud, while 76 % have at least one private cloud. You might still remember the cheeky marketing logo that Salesforce deployed so successfully, the one that said, “No Software”, even as they were selling software within the SaaS ecosystem.įast forward 20 years and today the Cloud is hardly a novelty. These companies, along with many others, helped create a brand new multi-Billion Dollar category where applications were provisioned, deployed, and managed in what we now call the Cloud. NetSuite & VMWare began in 1998, followed by Sage Intacct and Salesforce in 1999. The late 90s were a key turning point for the enterprise software market.
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