Global 100 software leaders

May 2013
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Global 100 software leaders

At a glance

The software industry is in the midst of significant change. Cloud, software-as-a-service (SaaS), mobile devices, and consumerization of IT, are changing how software vendors develop, market, sell, distribute and support their products. This report ranks leading software companies from key markets around the world, and shares insights into where the industry is going from executives from Adobe, BMC Software, CollabNet, Jive Software, NetSuite, Red Hat, SAP, SAS, Splunk, and TSIA.

Revenues and rankings for Saas

Top 10 SaaS Vendors as % of Revenue Among Global 100 Top 10 SaaS Vendors as % of Revenue Among Global 100
Top 10 SaaS Revenues Among the Global 100 Top 10 SaaS Revenues Among the Global 100

Dive deeper into the Global 100 software leaders report

Key survey data findings and feedback:

  • SaaS is gaining traction: Perpetual license revenue has been shrinking since 2004 while subscription revenue (including SaaS and other subscription models) is forecasted to have a 17.5% growth rate in the 2012-2016 timeframe. Strategic software companies are now vigorously evaluating aspects of their business models, including delivery methods, pricing strategies and sales compensation options.
  • Customer is king: With the adoption of cloud services, mobile devices and low-cost apps, CIOs are no longer the sole decision maker in the software purchasing process; end users must be satisfied in order to retain and grow enterprise sales.
  • Emerging hybrid models bring new challenges: A range of business models, ranging from the traditional licensed software to pure SaaS to hybrid approaches will co-exist and face a host of challenges for the foreseeable future. Identifying the right model without losing market share has become a major focus. Subscription models increase dependency on renewals and risk of customer turnover, making service levels and strategic pricing two of the most crucial components of software sales cycle.
  • Priority on pricing: With the consumerization of IT via low and no cost technology such as iTunes, Google and other apps, software companies are struggling to justify the difference in value between a low-cost mobile app and a full-strength, licensed enterprise software package.

SaaS trends

Although the traditional license model will be around for years to come, it is slowly losing its dominance to SaaS and subscription models. Most large, traditional software vendors are moving toward SaaS and will be faced with significant challenges as they make the transition.

The shift in enterprise software sales from license to services is amongst the most significant upheavals the industry has seen. Regardless of how quickly, or slowly, companies make the transition to SaaS, the evolution is extremely stressful, creating a number of dilemmas for the vendor. A migration to SaaS is likely to affect profitability, internal organisation, management, budgets and customer relationships.

Because enterprise customers increasingly pursue hybrid IT models, most large software vendors are likely to offer licensing and some kind of subscription model for some time to come.

The mix of models, particularly the shift to SaaS, also impacts profit margins. In fact, recent studies of the profitability of mature license models and emerging SaaS models by PwC find best-in-class SaaS models only generate one-fourth the profitability of best-in-class license models.

Read the complete analysis and learn how software companies are transitioning to SaaS.