Is a heavyweight title bout emerging between two major contenders in the enterprise applications space? Maybe -- if you feel that title bouts are started when only one of those contenders says something in a keynote and the other chooses not to respond at all.
Salesforce.com fired a salvo at SAP today when Keith Block, its president and vice chairman, told a Boston audience that "we will be passing SAP as the largest enterprise applications company in the world."
Block made the comment this morning at the Salesforce1 World Tour, which rolled into Boston today at the Hynes Convention Center. SAP, Block added, is the "third largest software company in the world. We believe we will be the third largest software company in the world."
Going for the Big Fish
Nothing like setting the highest of all goals. Salesforce has a few billion dollars of revenue to go to catch up to SAP, about four to five times where it's at now to be precise.
Salesforce isn't holding back, though, with its vision. Today, it says it's gunning for one of the Great Whites of enterprise software sharks. Block knows the Great Whites here well. He was a 26-year executive at Oracle before joining Salesforce last June. He was most recently Oracle's executive vice president of North America Sales and Consulting.
Salesforce1 is the company's new CRM platform, which speakers today said focuses on technologies in the Internet of Things space and mobile accessibility.
As we expected, the "gunning for SAP" theme drew some instant response, like this reaction from a Gartner analyst:
No Profit, No Laundry
CMSWire reached out to industry analysts to see if Salesforce overtaking SAP is a legitimate possibility.
Constellation Research’s R "Ray" Wang, founder and principal analyst, questioned which arena Block and Salesforce say they can overtake SAP.
He entertained four areas:
- Profitability: No. Salesforce hasn't turned a profit.
- Growth: Yes. That's happened.
- Customers: If live customers is the metric, that's possible. Number of customers could be more likely.
- Revenue: No. Salesforce is still small compared to SAP. Salesforce is at $4.07 billion of revenue. SAP is $16 to $18 billion, or four to five times bigger.
SAP, reached by CMSWire today, declined commentary.
Salesforce Chatter Files technology
Can Salesforce overtake SAP?
"Potentially, in terms of live customers in the cloud," said Elizabeth Hedstrom Henlin, senior analyst of software and applications for Technology Business Research, Inc. "But SAP’s commitment to migrating core applications to the cloud argues that SAP has an install base that trusts them, and is ready to follow where they lead."
Growth in business or industry applications in 2014 is coming at someone else’s expense, Hedstrom Henlin told CMSWire.
"And I can’t see Salesforce.com mounting the sort of comprehensive portfolio or vertical-led approach to challenge SAP or Oracle for profitable market leadership yet," she said. "Don’t count them out, though. (Salesforce CEO) Marc Benioff’s commitment to growth should never be underestimated."
Block stands by Salesforce's fourth quarter numbers from last year, saying the company had 37 percent growth with $1 billion of revenue in that quarter.
What Do Numbers Say?
Gartner's 2014 software analysis released this week had Salesforce ranked 10th and SAP fourth in revenue for software vendors. It had SAP's 2013 revenues at $18.5 billion and Salesforce's at $3.8 billion. Salesforce's growth rate compared to 2012 revenues, however, was at 33.3 percent, the best among a list that included some Great Whites: Microsoft ($65.7 billion), Oracle ($29.6) and IBM (29.1) topped the Gartner list.
The research firm highlighted Oracle's growth in particular.
"There is a shift in vendor rankings from 2013 at the top of the worldwide software market," Chad Eschinger, research vice president at Gartner, said in a statement. "This is the first time in Gartner's global software market share research that Oracle has ranked second in terms of total software revenue with $29.6 billion and capturing 7.3 percent of the global market. Global trends around big data and analytics with business investment in database and cloud-based applications helped to drive Oracle's top-line growth."
But Oracle isn't the one Salesforce's gunning for.
Its eyes, as Block put it today in Boston, "are set on SAP."