Welcome to the Cloud Wars Minute — your daily news and commentary show, hosted by Cloud Wars Founder Bob Evans. Each episode provides insights and perspectives around the “reimagination machine” that is the Cloud.
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In this Cloud Wars Minute, Bob Evans evaluates the question of ‘who is the #1 enterprise app vendor?’ between Salesforce and SAP.
00:29 — In late August, Salesforce reported a very strong quarter — referring to the one that ended on July 31. The company’s CEO, Marc Benioff, pointed out that Salesforce was the largest enterprise apps vendor in the world. That quarter, Salesforce’s earnings surpassed SAP’s for the first time ever.
01:00 — The reign of Salesforce as the number one enterprise apps vendor did not last long. In Q4, SAP reported total revenue of $9.2 billion, versus Salesforce reporting $7.84 billion in Q3. Bob believes this represents the different directions the companies are taking.
01:38 — For the quarter that ended on October 31, Salesforce reported that its growth rate plummeted for the first time in five years, falling below 20%. Bob suggests the larger point here is that things can change quickly in the cloud business.
02:36 — Salesforce has lost top executives, its growth rate slowed appreciably, and the company is unwilling to offer financial guidance as to where the company thinks it will be headed in the future.
03:00 — On the other hand, SAP has offered cloud guidance for the year, saying its cloud business will grow in constant currency between 22% and 25%. For Salesforce, these projections are unknown, as the company did not opt to offer financial guidance for the upcoming year. Here in the Cloud Wars world, “nobody owns the place, you just rent it.”