OREANDA-NEWS. With cloud computing rapidly reshaping the software industry, PwC has ranked the 25 Fastest Growing Cloud Companies to help understand what drives success when vendors move to the cloud.

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.

The ranking includes a diverse mix of companies, from startups to 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.

SaaS having biggest impact on vendors

"Companies are becoming increasingly dependent on software as a service (SaaS), and this area really exemplifies the cloud's growth," says Mark McCaffrey, PwC Global Software Leader. "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."

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.

"Not all software companies will get it right immediately," cautions Raman Chitkara, PwC's Global Technology Leader. "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."