Thursday , 27 October 2016
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PwC Sees Changing Climate for Cloud Companies and Software Industry

As more and more enterprises give up license-based software in favor of faster, more convenient cloud services, the software industry itself is changing dramatically, according to a recent report from the advisory firm PwC (formerly known as PricewaterhouseCoopers). Although legacy software companies that have moved into the cloud are reaping the benefits of the growing “as-a-service” ecosystem, they are also facing some risks.

The “PwC Global 100 Software Leaders” report, released late last month, finds that the revenues for the top 100 cloud companies rose by 10 percent between 2012 and 2014, from $247.5 billion to $272.2 billion. The top five companies providing cloud services globally were, in order, Microsoft, Oracle, IBM, SAP and Symantec.

Since PwC’s last “100 Software Leaders” report was released two years ago, cloud adoption has continued to grow to the point where it is now “affecting the climate of every software company.” Among the top 50 vendors, cloud-based software now accounts for around 10 percent of their total revenues, according to the latest report.

Customer Support a Differentiator

“While the cloud continues to underpin massive change, other trends are building on its capabilities to create opportunities in digital innovation, industrial capabilities and convergence within vertical markets,” the PwC report noted. “The spoils go to anyone whose code represents an improvement.”

That means that startups can quickly emerge as up-and-coming challengers to existing leaders, the report said. PwC pointed to two companies appearing for the first time on this year’s Global 100 list: Workday, which ranked 72, “is challenging existing companies in the human resources space,” and Splunk, a startup big data analytics firm that debuted at number 100.

In addition to having to watch their backs for new competitors, cloud services leaders must also pay increased attention to customer service. That’s because, “as software options proliferate, and…