Top Global Software Players 'Caught in a Conundrum'

  • By

    Dennis McCafferty

Top Global Software Players 'Caught in a Conundrum'

Top Global Software Players 'Caught in a Conundrum'

Microsoft (www.microsoft.comSoftware revenue: $57.7 millionSaaS revenue: $788,000Total revenue: $72 millionSoftware revenue as a percentage of total: 80%SaaS revenue as a percentage of software revenue: 1.4%

Cloud, mobile solutions and the overall consumerization of IT are driving software sales. But the most intriguing trend is the rising demand for software as a service (SaaS), according to a recent study from PwC U.S. In its annual report, "Global 100 Software Leaders," PwC reveals that SaaS revenue accounted for at least 40 percent of overall software revenue for 10 of the companies included in the Global 100 list. However, many top software companies are "caught in a conundrum": Although they need to innovate, they still derive most of their revenue from traditional enterprise software licensing. "Vendors need to continually evaluate both the changing priorities of customers and the industry, because these evolving sentiments are causing deep structural changes and fundamentally shaping business models," said Patrick Pugh, PwC's U.S. software and Internet leader. "To drive future growth, North American software vendors must prioritize transforming their business models to address the realities of the SaaS environment and incorporate social enterprise, IT consumerization and data analytics." Subscription revenue (including SaaS) is projected to reach one-quarter of total software revenue by 2016. PwC compiled the data for its software study using financial information for nearly 300 vendors worldwide in the calendar year 2011. Channel Insider looks at the top 12 on PwC's list.

This article was originally published on 2013-06-06
Dennis McCafferty is a freelance writer for Baseline Magazine.