PricewaterhouseCoopers (News - Alert) (PwC), a global provider of financial and tax services, has released its “25 Fastest Growing Cloud Companies” list as part of its “Global 100 Software Leaders” report. Together, they reflect on the mix of established and incoming companies that have made the switch from development of on-premise to cloud-based software.
Mark McCaffrey, a global software leader at PwC, commented on the reality that many companies are investing more of their resources in cloud computing because it awards them higher profits while also providing lower costs for their customers.
“Companies are becoming increasingly dependent on software-as-a-service (SaaS (News - Alert)), and this area really exemplifies the cloud’s growth,” McCaffrey said. “Software vendors who’ve made the transition to SaaS are well on their way to restructuring their operations to the new realities of lower average sales prices and margins.”
This forms the basis of why many established enterprises have moved from creating software that was meant to be used on-premise to creating software that users can access from any Internet connection. Of course, there are also other benefits to cloud computing – such as a lowered time-to-market for developers and the ability for consumers to use a mix of desktop and mobile devices – all of which provide a base for incoming startups to begin their own journeys in an entirely cloud-focused mindset.
The silver lining of cloud development is that it is much easier for individuals and businesses to make the switch from one cloud-based software provider to another. If clients do not like their service, they can move to another host with relative ease. That benefit for users means that service providers must remain diligent with the products they offer and the support that surrounds those offerings. Cloud hosts must provide exceptional customer service, or clients will leave.
Some vendors have a lot of practice dealing with long-term customers. PwC notes in its announcement of the “25 Fastest” report that at least a third of the companies on that list have their roots in long stretches of on-premise software deployment. They sold licenses to users that would lock them into potentially years of service. For such vendors, the transition to the cloud may be more difficult because they are up against a range of newcomers that understand the direct relationship between customer service and brand loyalty. Even the established brands that have always provided good customer service may need to find a new level to their abilities.
Microsoft and Apple (News - Alert) arrive in the top 25 list as the types of companies that one may recognize from years of on-premise software creation. Now, they both are making inroads in cloud computing against newcomers such as Coupa, Workday, and Exact – three of the financial startups that ranked among their larger counterparts.
Raman Chitkara, another global technology leader at PwC, also commented on the relationship between the top 100 software leaders and the fastest growing of the bunch.
“Not all software companies will get it right immediately,” Chitkara added. “Among the top half of our Global 100 Software Leaders ranking, six companies also appear on our Fastest Growing Cloud Companies list. We still have a relatively long way to go before the leaders and laggards in cloud are well established.”
Chitkara’s statement shows that not all the established global companies are moving as fast as they might prefer. It also hints that many startups are achieving quick routes in their markets of choice. With new companies created every day, it is unlikely that the dust will ever completely settle. Some companies will stick around through the coming phases of computing while others will drop away. The true test of leader and laggard status will come only in future years where PwC can compare its fastest 25 and top 100 lists with many decades of previous years’ data.