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Microsoft Is Now King Of Enterprise SaaS

Summary

The Q2 report from Synergy Research Group revealed that Microsoft has surpassed Salesforce to become the overall leader in the global enterprise SaaS market.

Microsoft was only number two with 7.9% market share of the global enterprise Software-as-a-Service industry in H1 2015.

Synergy Research Group reported that Q2 2016 resulted in Microsoft taking 15% of the enterprise SaaS market, beating Salesforce’s 14% share.

I expect Microsoft to further increase its market share in SaaS. Aside from SharePoint and Office 365, Microsoft is now offering its $7/month Windows 10 Enterprise E3 product.

We should remain long Microsoft (NASDAQ:MSFT). Nadella's March 2014 vision to transform Microsoft into a Cloud First company is fast bearing fruit. Microsoft has indeed quickly shifted its enterprise software products from on-premise installation to a cloud-based subscription.

As per the Q2 2016 report of Synergy Research Group, Microsoft has unseated Salesforce (NYSE:CRM) to emerge as the new overall leader in global enterprise Software-as-a-Service (SaaS) industry.

Synergy Research Group's report explained that Microsoft's Collaboration software SharePoint and Office 365 subscription products helped it surpass Salesforce. Yes, Salesforce remains the leader in CRM (Customer Relationship Management). However, Microsoft's SaaS growth story is propelled by its dominant position in enterprise cloud Collaboration software.

It is also worth noting that the chart below does not list Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) as a major competitor in any of the different SaaS segments. Microsoft's enterprise Office 365 appears to have left Google Apps For Work in the dust. Microsoft is also among the top three leaders in CRM and Other Enterprise Apps segments.

(Source: Synergy Research Group)

This is not a surprise development. The Q1 2016 report of Synergy Research Group already hinted that Microsoft's charge on Collaboration...


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