Microsoft was 'clear' software market leader throughout last decade - analyst

SaaS saw revenues grew by $100bn in the last 10 years but still only accounts for 23 per cent of the total software market

Microsoft saw its total software revenues double during the last decade to more than $100bn (£76m), according to data compiled by Synergy Research.

The analyst hailed the tech giant for being the "clear software market leader" over the period, with its software-as-a-service (SaaS) revenues growing from zero to more than $20bn.

It added that the number of new vendors that entered the market in the past 10 years urged legacy vendors to push their SaaS offerings more, and also reinvigorating the overall market.

Based on spending from the first three quarters of 2019 and its forecast for Q4, Synergy predicted that the worldwide enterprise software market in 2019 was over $445bn, with the SaaS segment contributing $101bn to that figure. This represents 23 per cent of the total market, growing from less than two per cent in 2009, the analyst added.

On-premise, perpetual licence software revenues grew by an average of over four per cent per year over the same decade.

The largest SaaS segments in the enterprise IT market are CRM, collaboration and human capital management (HCM), with the latter two showing the highest growth rates.

"Buying SaaS versions of software has become ever more attractive to enterprises throughout the last decade, thanks to dramatic improvements in hosting capabilities, more flexible economics and increased comfort in moving to a cloud-based operational model," said John Dinsdale, chief analyst at Synergy Research Group.

"The entrance into the market of new born-in-the-cloud software vendors has also provided a major boost to the SaaS market. In the early days, Salesforce was very much the poster child for SaaS, but over the last 10 years we've also seen many new SaaS vendors enter the market, including Workday, Zendesk, ServiceNow, Atlassian, Splunk, Cloudera, Carbonite and Tableau.

"These new entrants have caused the traditional software vendors to push SaaS more strongly than they might otherwise have done."