Salesforce overtakes SAP as world's largest enterprise application vendor

Another indication that the cloud is the biggest growth market the world has ever seen is that cloud-native Salesforce has replaced iconic SAP as the world’s largest enterprise application vendor.

While some say Salesforce’s rise to the top of the enterprise applications world was inevitable given its extraordinary string of 73 consecutive quarters of revenue growth and SAP’s need to move from its decades-long dominance of the on-premises world to the cloud, this achievement by Salesforce must be recognized and applauded.

Kudos, Marc Benioff, for the remarkable success your company has enjoyed for 23 years, as you and Salesforce have embodied the transformative and unprecedented power of the cloud.

At the same time, I would like to emphasize that the rise of Salesforce is not synonymous with a “decline” of SAP. In the second quarter, SAP was one of the world’s fastest growing major cloud providers, with a 34% growth rate in cloud revenue, surpassed only by Google Cloud at 36% – for a brief overview, watch this Cloud Wars Minute video. (Snowflake’s recent 83% growth rate is staggering, but since Snowflake’s total revenue is so much smaller than the other Cloud Wars Top 10 companies, I’ll leave it out of this comparison.)

In addition, SAP’s large and growing portfolio has performed consistently well, as I described in this episode of Cloud Wars Minute. So the company’s new and uncompromising commitment to the cloud is paying off.

So here are the latest quarterly numbers for each company and the evidence that Salesforce can now claim to be the world’s leading business application provider:

For the second quarter ended June 30, SAP reported total revenue of $7.52 billion. (Officially, sales were reported at 7.517 billion euros, but the rising dollar and euro are now at 1:1 parity.)
For Salesforce’s second fiscal quarter, which ended July 31, the company reported total revenue of $7.72 billion.

During Salesforce’s Aug. 24 conference call, Benioff acknowledged Salesforce’s success with a sympathetic recognition of SAP’s many years of excellence.

Marc Benioff, CEO Salesforce

"I look at this quarter as kind of a milestone," Benioff said. "I'm a big fan of SAP and have a lot of respect for their business and what they've done in the marketplace over the last 40, almost 50 years. And to see that our business did more sales in July than it did in June was very meaningful to me, and I'm very grateful and proud of our team for achieving that tremendous scale."

For a cloud-to-cloud comparison, SAP reported cloud revenue of $3.13 billion for the second quarter, compared with Salesforce’s $7.72 billion. Significantly for SAP, cloud revenue is now larger than traditional on-premises revenue, and cloud growth rates have increased over the last four quarters.

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