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How Do the Mega-Vendors’ Cloud Strategies Compare – Update

by Andrew White  |  July 14, 2017  |  2 Comments

Back in April I started to compare the mega-vendor’s revenues and strategies related to how cloud changes everything.  With Oracle’s Q4 2017 out of the way, I thought I would update the material.

Cloud-based business applications, or SaaS, describe and support what a business actually does, and are therefore more important to a CEO and business leaders such as sales, marketing, supply chain, operations etc.  Cloud infrastructure does not describe what a business does; infrastructure (storage, processing and pipes) is more important to the CIO, and this describes what IT does (to support the business apps, among other things).  Platform as a Service is another kind of IT centric topic in that it provides a platform on which users can assemble their own custom apps, applets or large-scale applications.

So let’s look at some of the latest data and what I think can be compared.

Oracle’s last quarterly earnings report (Q4 fiscal 2017, as of June 21 2017):

  • Cloud SaaS: $0.964bn, or about 9% of its revenue
  • Cloud PaaS & IaaS: $397k, or about 4% of its revenue
  • DaaS not yet visible but growing

Sap’s last quarterly earnings report (Q1 2017, as of March 31 2017):

  • Cloud Subscriptions and support: €905m, or about 17% of its revenues
    • We estimate:
      • A small amount is PaaS and so most of the number is SaaS
      • IaaS: €0
      • DaaS: €0 *

Amazon’s last quarterly earnings report (Q1 2017, as of March 31 2017):

  • AWS $2,56bn ‘net sales’, or about 8.8% of consolidated net sales
    • We estimate:
      • A small but growing amount is PaaS so most of this number is IaaS
      • SaaS: $0
      • DaaS: $0 *

Salesforce’s last quarterly earnings report (Q1 2018, as of April 30 2017):

  • SaaS: Sales Cloud, Marketing Cloud, Service Cloud, App Cloud and other: $2.2bn
    • We estimate:
      • Majority is SaaS but there is a growing PaaS element
      • IaaS: $0
      • DaaS: $0 *

* DaaS is made up of:

  • Licensing data (for use elsewhere)
  • Licensing analytics (a form of data already pre-processed for some purpose) and for integration into a business process or decision

So can we do some analysis on this data?  Who is making progress across all cloud vectors?  I will update this page once I get responses from the other Vendor Leads to my questions…

Who is “winning” in the cloud?  Well it depends on what part of the cloud you look at.

If you focus on infrastructure and how cloud computing will save IT money, then you notice Amazon, as AWS is described as an IT infrastructure platform.  IaaS is key to helping IT save money.

In contrast, if you focus on what is more important to the CEO and what a business actually does, Amazon does not really figure but Oracle, Salesforce and SAP do.  This is because SaaS is central to business applications (process support) and PaaS is more valuable as it can help extend SaaS offerings to augment standard processes with unique, differentiating capabilities.

So now you notice that Oracle has a toe in all sides of this dialog.  If you were looking to build a core, differentiated and innovative strategy you would want to draw on all layers of the “cloud” cake – from IaaS, PaaS, SaaS and the emerging Data as a Service, or DaaS.

So conceptually Oracle is well placed in a broad sense though other vendors may have started developing offerings in piece-parts earlier than Oracle.

On the face of it, no single vendor is “winning” in the cloud since the cloud is not one thing. But it does look interesting as you try to get under the covers, or perhaps, behind the silver lining….

Category: amazon-vendors  oracle  salesforce  sap-vendors  

Andrew White
Research VP
8 years at Gartner
22 years IT industry

Andrew White is a Distinguished Analyst and VP. His roles include Chief of Research and Content Lead for Data and Analytics. His main research focus is data and analytics strategy, platforms, and governance. Read Full Bio

Thoughts on How Do the Mega-Vendors’ Cloud Strategies Compare – Update

  1. Hi Andrew. I agree – the cloud is not just one thing. In fact, the way the word “cloud” is used is so nebulous that precisely categorizing revenue must be extremely difficult. Several years ago I received a flyer in my door for a “cloud based” lawn service! Yeah, right. Anyway, what one vendor calls cloud varies dramatically from what another vendor will call cloud. I would even assert that it may have been a mistake to muddy the waters by calling SaaS cloud at all, as it is in no way comparable to IaaS and doesn’t need cloud infrastructure to qualify as SaaS. I ran an ASP back in 1999 that described its services as SaaS even though no one even knew what cloud was at that time. Salesforce did the same thing. They just managed to survive the market crash of 2000, get themselves re-labeled as cloud and start reaping the benefits of all the new market attention. Oracle has always been a marketing driven firm, so they may be “well positioned” in that respect, but I wonder how much true cloud technology they really have.

  2. Trent Dilkie says:

    Curious why you would not include Google CloudPlatform and Microsoft Azure in your analysis.

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