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SaaS Market Still Soaring: Microsoft Takes Crown From Salesforce In 2016 Q2, According To Synergy Research

The Software-as-a-Service market grew 33 percent in the second quarter of 2016 and saw more than $11 billion in overall sales, reports Synergy Research Group.

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The Big Battle

The competition for the top spot between Microsoft and Salesforce is representative of the larger battle playing out in the SaaS market — that between traditional software vendors offering a broad range of products, and those born-in-the-cloud upstarts that focus on a specific application type or industry, according to John Dinsdale, Synergy's chief analyst and research director.

And Microsoft's push into the lead over Salesforce illustrates the current dynamic in that battle.

"It might be tempting to assume that the latter camp is leading the charge," Dinsdale said, "but in fact the traditional software vendors are growing their SaaS revenues more rapidly, helped by their huge base of on-premise software customers that can be aggressively targeted for conversion to a SaaS consumption model."

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