SaaS is driving the 60 fastest-growing software companies
CIOZone.com has ranked the top-60 fastest-growing (public) software companies of at least $150 million in revenue, with VMware leading the pack and Red Hat claiming 12th place with a 33.6 percent growth rate. Not bad for a company that gives away its software for free.
But then, perhaps it's not surprising since Google, ranked second on the list, largely does the same.
What's most impressive in the list, however, is the growth rate being sustained by Oracle and Microsoft, because they're growing from a much larger base. It's fantastic that Red Hat is growing at 33 percent on a ~$500 million base. But Microsoft is growing by 25.7 percent on a $57 billion base, and Oracle is rising 24.9 percent on a $20 billion base.
That's amazing.
For smaller companies (more than $50 million in sales and less than $150 million), Omniture (Utah-based - hurray!) leads the pack with a 79.5 percent growth rate on a $143 million base. Not too shabby.
While the list is predominately comprised of proprietary-software companies, CIOZone points out that these vendors are succeeding precisely because they, too, are changing the game from a proprietary license model to a subscription model:
Software that increases the efficiency of corporate data centers, or that runs as an Internet-delivered service, is on a roll. Most of the fastest-growing software companies are doing one or the other....
While it was a good year for many software vendors, it was particularly good for companies that have discarded the older paradigm of install-and-maintain and are making their products available as online subscriptions.
This bodes well for open-source companies, for two reasons. One, many SaaS companies depend on open source (and will pay for it) to run their businesses.especially as an increasing number operate with a dual-mode model wherein they make their software available as an open-source download, with a pay-for-SaaS model to complement that. Kaltura, Loopfuse, and others are adopting this model, and I think it promises to be a highly profitable model for those that can pull it off.
