In yet another indication that the cloud is the greatest growth market the world has ever known, cloud-native Salesforce has displaced iconic SAP as the world’s largest provider of enterprise applications.
While some might say the ascension of Salesforce to the top of the enterprise-apps world was inevitable given its extraordinary string of 73 straight quarters of rising revenue and SAP’s need to pivot into the cloud from the on-premises world it dominated for decades, this achievement by Salesforce needs to be recognized and applauded.
So, hats off to you, Marc Benioff, for the remarkable run your company has been on for 23 years as you and Salesforce have personified the transformative and unprecedented power of the cloud.
At the same time, I want to emphasize that Salesforce’s ascendancy does not equate to a “decline” on the part of SAP. For Q2, its 34% cloud-revenue growth rate made SAP one of the world’s fastest-growing major cloud providers, second only to Google Cloud’s 36% — and you can get a quick rundown on that in this Cloud Wars Minute video. (Snowflake’s recent 83% growth rate is stunning, but because Snowflake’s overall revenue is so much smaller than that of the other Cloud Wars Top 10 companies, I still keep it out of these comparisons.)
Plus, SAP’s large and growing portfolio performed well across the board as I described in this episode of the Cloud Wars Minute, so the company’s new and uncompromising commitment to the cloud is paying off handsomely.
So, for the record, here are the most recent quarterly numbers for each company and the evidence with which Salesforce can now claim to be the world’s #1 supplier of business applications:
- For SAP’s second quarter ended June 30, the company reported total revenue of $7.52 billion. (Officially, it reported revenue of 7.517 billion euros, but the surging dollar and the euro are now at 1:1 parity.)
- For Salesforce’s second fiscal quarter ended July 31, the company reported total revenue of $7.72 billion.
During Salesforce’s August 24 earnings call, Benioff reflected on Salesforce’s achievement with a gracious acknowledgement of SAP’s long history of excellence.
“I look at this quarter very much as kind of a milestone,” Benioff said.
“I’m a big fan of SAP and have a lot of respect for their business and what they’ve done in the market over the last 40, almost 50, years. And to see our business in July do more than they reported in June in terms of revenue, that was very meaningful to me and I’m very grateful and proud of our team for kind of hitting this tremendous level of scale.”
For a cloud-to-cloud comparison, SAP reported Q2 cloud revenue of $3.13 billion compared to Salesforce’s $7.72 billion. What is significant for SAP is that its cloud revenue is now larger than its traditional on-premises revenue, and its cloud growth rates have been rising for the past 4 quarters.
Life in the Cloud Wars is many things, but dull sure isn’t one of them.
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