First-time ranking shows opportunities and challenges facing software vendors
TORONTO, Aug. 16, 2016 /CNW/ - Canada's OpenText was ranked number 1 in PwC's 25 Fastest Growing Cloud Companies. Released as part of PwC's Global 100 Software Leaders research report, this first-time cloud-specific ranking suggests that no one type of company has the secret formula for success in the cloud. With cloud computing rapidly reshaping the software industry, the report helps understand what drives success when vendors move to the cloud.
The ranking includes a diverse mix of companies, from start-ups and high-profile companies whose business models rely on the cloud to companies with a tight focus on specific areas such as expense management, mid-market ERP and accounting.
"Growing at a rapid pace over the recent number of years, cloud computing has become an important mechanism for organizations to stay competitive in a fast and constantly evolving business environment. Data shows that the cloud expenditures account for an increasing share of IT spending across various sectors in the market," says Richard Jhang, Partner, Technology, PwC Strategy& Canada. "We're glad to see a Canadian company was ranked as the number 1 fastest growing cloud companies in the world—pointing to Canada as a leader in the sector and enabling in the adoption of cloud computing."
Software as a Service (SaaS) having biggest impact on vendors
At least one third of the 25 Fastest Growing Cloud Companies are established firms that flourished for years from selling on-premises software licenses. It's critical to remember that while cloud applications are less expensive to deploy, their switching costs are also lower—meaning that subscription revenue can dry up if vendors don't think more carefully about customer service—service that spans from the user interface to product support.
The data and trends do illustrate several key themes:
- Customers are increasingly accepting the cloud in spite of its foibles.
- Cloud migration presents both technical and business challenges for vendors.
- The cloud gives software vendors a greater opportunity for customer engagement.
- The success in cloud demands faster product cycles from software vendors.
What are the operational considerations?
With the cloud model affecting nearly every aspect of a vendor's business, PwC identifies several operational considerations for software companies transitioning to the cloud. Pivoting to the cloud involves significant changes to a company's business, both internal and external, including product development, marketing and sales, customer service and support, and revenue.
The impact of cloud computing is vast, with business issues, technical issues, cultural issues and customer issues to tackle. The cloud is indeed a new paradigm, and software vendors need to stray from their comfort zones to successfully transition all phases of the company.
For more information and to download the Top 25 Fastest Growing Cloud Companies report, click here.
About PwC's 25 Fastest Growing Cloud Companies and the Global 100 Software Leaders
The PwC 25 Fastest Growing Cloud Companies list is based on corporate financial statements (GAAP-based where applicable), other public sources and estimates for privately held companies. The ranking is based on year-to-year growth rate in Public Cloud revenue from 2013 to 2014, the most recent year for which complete data was available. Due to variances in fiscal years, the results were 'calendarised' for both years.
PwC recently launched the fourth edition of its Global 100 Software Leaders ranking since 2010. The current edition continues our tradition of monitoring and analysing the leading companies and trends in the industry. Our goal is to help our clients understand both the obvious and the underlying forces influencing the software industry.
The new PwC Global 100 Software Leaders list is based on corporate financial statements (GAAP-based where applicable), other public sources and estimates for privately held companies, as compiled for PwC by the Global Software Business Strategies Group at IDC. Learn more about the report's methodology here.
About PwC Canada
At PwC Canada, our purpose is to build trust in society and solve important problems. More than 6,500 partners and staff in offices across the country are committed to delivering quality in assurance, tax, consulting and deals services. PwC Canada is a member of the PwC network of firms with more than 208,000 people in 157 countries. Find out more and tell us what matters to you by visiting us at www.pwc.com/ca.
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SOURCE PwC (PricewaterhouseCoopers)
Image with caption: "Top 50 Software Companies' SaaS and PaaS revenue (CNW Group/PwC (PricewaterhouseCoopers))". Image available at: http://photos.newswire.ca/images/download/20160816_C5242_PHOTO_EN_753840.jpg
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