While each of these 3 high-flying cloud providers serves very different parts of the market, the unifying trend that’s helped boost their combined market cap to $500 billion is their shared devotion to industry-specific solutions.
On my weekly Cloud Wars Top 10 rankings, Salesforce is #4, Workday is #8, and Snowflake is #10. On our other and more-specialized ranking of major cloud providers—the Industry Cloud Top 10—Salesforce is #1, Workday is #9, and Snowflake as of yet has not made the list but is a strong contender.
And as of this week, the steadily rising valuations of those 3 companies has given them a combined market cap of a very cool half-a-trillion dollars:
- Salesforce, $302 billion: highest market cap in the company’s storied history;
- Snowflake, $120 billion: having just reached a $1-billion annualized run rate, Snowflake has a spectacularly high ratio of market cap to revenue—but with growth rates still approaching triple digits, that revenue is soaring; and
- Workday, $75 billion: like with Salesforce, Workday’s market cap has reached an all-time high.
We’ll all find out what fiscal-Q3 holds for these companies within the next two weeks as Salesforce releases its numbers on Nov. 30, Workday on Nov. 18, and Snowflake on Dec. 1. Each operates on a fiscal calendar ending Jan. 31.
Industry-cloud focus across the board
So what is this industry-cloud connection across the 3 companies, and why have I chosen to call it out here? Let’s start with Salesforce, and I’ll see if I can make that connection.
Salesforce: the #1 industry-cloud player in the world
As noted above, Salesforce is #1 on my Industry Cloud Top 10 list and has held that top spot since the list made its debut several months ago. Salesforce Industries generated $790 million in quarterly revenue for the 3 months ended July 31, which gives it an annualized run rate of almost $3.2 billion. And as noted in yesterday’s lead Cloud Wars article, executive vice-president Jujhar Singh recently told me that more than half of Salesforce’s massive global sales organization now have vertical-industry responsibilities.
And all this week, Salesforce’s industry-cloud strategy, solutions, and customers have been on full display at our Industry Cloud Battleground Week digital event (you can register to watch the event and have access to all content here).
Workday: rapidly raising its industry-solutions profile
While Workday does not publicly disclose any financial details about its industry-cloud business—and indeed, as of yet, Salesforce is the only major vendors that does—there’s no question that the company’s been boosting its industry-solutions profile over the past year as businesses in every industry have been racing into their digital futures. For example, the company’s showcasing many of those solutions at our Industry Cloud Battleground Week event. Plus, Workday’s developed a highly credible strategy involving broad collaboration with its ecosystem partners and a vibrant co-creation strategy, and industry-marketing VP Indy Bains has emerged as a compelling evangelist for this business.
You can see a list of Workday’s Industry Solutions here, with an intro at the top of that page saying, “Built from the cloud up, Workday is equipped to grow, change, and evolve with your organization to meet the unique needs of your industry. By taking advantage of the most innovative technologies, Workday solves many of the problems that plague traditional ERP systems.”
Snowflake: industry-specific data clouds
Six months ago, in a piece called Snowflake Bets Continued Hypergrowth on Explosive Trend in Cloud, I made this observation about that strategic imperative for the high-flyer:
Snowflake is intensifying the vertical-industry focus that has been a major part of its early success and that will continue to enhance the relatively small company’s credibility and appeal among large enterprises, says CEO Frank Slootman.
On top of its world-class technology and highly disruptive vision for helping every business become data-powered, Snowflake is betting that its unconditional adoption of the move toward industry-specific solutions and expertise will enable it to continue delivering remarkably high growth numbers.
The cloud industry’s fairly abrupt shift to vertical-market capabilities is highly transformative for the entire sector, with every single company on the Cloud Wars Top 10 embracing the industry-oriented go-to-market strategy.
For Snowflake, such a move is particularly critical because it is so much smaller than all the other major cloud players and therefore needs to demonstrate rapidly and unequivocally to major corporations that it has not only the technical chops to be a strategic partner, but also the industry-specific savvy and expertise.
On Snowflake’s website, Industries plays a starring role in the Solutions section, with the company claiming, “Thousands of organizations count on Snowflake to power their data strategies and deliver industry-leading products and services.” The company currently specializes in these industries: Financial Services; Healthcare and Life Sciences; Retail and CPG; Advertising, Media, and Entertainment; Public Sector; and Education.
For 3 companies that didn’t even exist 23 years ago, a combined market cap of half-a-trillion smackers is an astonishing achievement. But you know what happens to high achievers in this market: they are expected to keep delivering outsized performances regardless of competition, market tastes, or anything else.
So I find it not at all surprising that Salesforce, Snowflake, and Workday are all accelerating their efforts around industry clouds, which have become the hottest segment of the enterprise cloud.
And that is certainly saying something because the enterprise cloud is the greatest growth market the world has ever known—and now industry clouds are leading the way in driving that growth to new levels.
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