Salesforce tower seen from below
Salesforce tower seen from below

Can Salesforce Fight Off Google, Microsoft, SAP for #1 in Industry Clouds?

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Can Salesforce win the frantic race among the Cloud Wars Top 10 to become the leader in the booming market for industry-specific cloud solutions?

With every Top 10 company—and particularly Google, Microsoft and SAP—declaring that industry-specific solutions are an absolute top priority, Salesforce will need to stay lean and hungry to retain its current hold on the #1 spot among widespread and extremely aggressive competition.

On my weekly Cloud Wars Top 10 rankings, Microsoft is #1, Google is #3, Salesforce is #4, and SAP is #5.

But the extraordinary activity among the Cloud Wars Top 10 as they position themselves for huge opportunities in vertical-market solutions and capabilities has inspired me to launch a second Top 10 list: the Industry Cloud Top 10. I’ll be rolling that out the week of April 26, and I expect it will include some familiar faces as well as some new ones.

For example, privately held and relatively low-key Infor is betting that its 19-year-long focus on industry-specific solutions will enable it to snag a spot new the top of the new Industry Cloud Top 10. You can read all about that in my recent piece called Infor Leapfrogs Microsoft, Oracle, SAP: $1 Billion in Vertical Apps.

So, while I have more research to do across a handful of candidates for the Industry Cloud Top 10, here are some early thoughts on how things might play out. Please bear in mind this is a work in progress and I’m still vetting some of the players.

  • Salesforce will, I believe, debut in the #1 spot on the Industry Cloud Top 10 because it has publicly disclosed that its industry-cloud revenue is on a $2-billion annualized run rate. And that came in a disclosure late last year, so I would suspect that in the 4 months since then, Salesforce’s industry-cloud business could well be even bigger than that.
  • Infor said its industry-cloud revenue is on a $1-billion annualized run rate. So unless one of the major cloud players can show a bigger number, Infor will probably debut at #2 on the Industry Cloud Top 10.
  • Beyond those two companies that have disclosed a general figure for their industry-cloud revenue, things get a bit less clear. But that’s where the fun of compiling your own list comes in—I need to make some judgment calls from here on out. So here are the next wave of contenders, perhaps in the order—or close to it—where they’ll appear on the Industry Cloud Top 10 later this month.
  • Google Cloud CEO Thomas Kurian was the first cloud-industry CEO to loudly and proudly declare his intentions for what he, more than 2 years ago, referred to as “industry-specific solutions.” Kurian has been adamant in noting that these new AI-powered solutions do not compete with the well-established LOB applications, but instead can give them new life and value by extracting data from them and using it to do things those traditional systems were never meant to do. So I think Google Cloud has a good shot at coming in at #3—but it will have to stave off two very worthy competitors in SAP and Microsoft to do so. For more on that, please check out Inside World’s Hottest Cloud Vendor: a Chat with Google Cloud CEO Thomas Kurian.
  • Microsoft just dropped a cool $20 billion to fortify its position in the healthcare vertical via its acquisition of Nuance, which specializes in conversational AI and ambient intelligence. This is clearly a long-term bet for the future because Microsoft is willing to pay a whopping 14X of Nuance’s annualized revenue of about $1.4 billion. Perhaps even more telling, though, was the claim made by CEO Satya Nadella in late February that Microsoft has adopted an “industry-first focus.” As I wrote a couple of months ago, SAP & Oracle Beware: Microsoft CEO Nadella Declares “Industry-First Focus”.
  • SAP has some superb assets to lean on in this competitive battle: its decades of strategic engagement with and knowledge of more than 20 industries. But it now must move faster than ever before to reimagine all that expertise and all that on-premises code for the cloud. SAP Industries president Peter Maier is confident the company can do so, and in a recent conversation Maier said SAP plans to go well beyond that. Maier said SAP plans transcend the vision of its competitors by not only offering industry applications for individual customers, but also building industry networks connecting vertical stakeholders from all levels of various industries. It’s an ambitious plan and one that could well unlock huge value for SAP’s customers and SAP itself.

Oracle, IBM and AWS also have big plans for industry clouds, and I hope to speak with them soon. The same is true for ServiceNow and Workday.

And then there’s the quixotic Snowflake, which is punching far above its weight in the impact it’s having in the wickedly competitive cloud marketplace despite the fact that many competitors are 20X, 30X or even 60X bigger than Snowflake.

Check out Snowflake CEO Frank Slootman’s views on vertical specialization in Snowflake Bets Continued Hypergrowth on Explosive Trend in Cloud.

Disclosure: at the time of this writing, Google Cloud, SAP and Oracle were among the many clients of Cloud Wars Media LLC and/or Evans Strategic Communications LLC.

 

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