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Microsoft1New findings from Synergy Research Group highlight Microsoft is growing healthily in the Software-as-a-Service (SaaS) market segment, but Salesforce is still market leader.

According to the research, Microsoft demonstrated the second highest level of growth within the segment at 70% year-on-year, only behind SAP who were at 73%, but still only sits second in the market share rankings. Salesforce was one of only four in the top ten for the segment who demonstrated less than 50% growth, however still accounts for just below 15% of the worldwide market share for SaaS. Adobe, IBM, Oracle, Google, ADP, Intuit and Workday complete the top ten.

“In many ways SaaS is a more mature market than other cloud markets like IaaS or PaaS,” said John Dinsdale, Chief Analyst at Synergy Research Group. “However, even for SaaS it is still early days in terms of market adoption. It is notable that the big three traditional software vendors – Microsoft, Oracle and IBM – are all now growing their SaaS revenues faster than the overall market and yet SaaS accounts for less than 8% of their total software revenues.”

The Software-as-a-Service has been demonstrating healthy growth over recent years, as Synergy estimates the market segment has grown by 40% over the last 12 months, and is expected to triple over the next five years. The growth claims are also supported by research from Cisco. Last year the team predicted by 2019 59% of total cloud workloads will be SaaS, compared to 45% in 2014.

The research also highlights Microsoft as making positive steps in the consumer SaaS market segment alongside its enterprise business. While the consumer segment is roughly a third of the size of the enterprise market, the company’s growth in this area exceeding competitors who currently have a more assured position in the space.

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