Quick, which company is more valuable: Microsoft or IBM?
SAP or Cisco?
The following list will tell you.
While consumer tech companies like Facebook and Zynga have been high-profile disappointments for investors, enterprise companies have been the big success story of 2012, with fantastic IPOs (Splunk, ServiceNow, Infoblox), giant venture capitalist investments (Github, Box) and hot new trends like big data and cloud computing.
The multibillion companies of the future will be driven by enterprise and business-to-business markets. We know that because today’s enterprise tech companies are some of the biggest, most successful companies in the world.
All told, the enterprise companies on this list represent over $1.7 trillion in value, based on market capitalisation, according to Google Finance.
Note that while compiling this list, we were pretty picky about which companies to include. If the company mostly sold stuff to consumers, we ignored it. So Apple, Facebook, Google didn’t make the cut.
And that made this list of superstar tech companies all the more interesting. You’ll be surprised.
Market cap: ~$12 billion
Symantec makes enterprise security software including anti-virus, authentication, backup and recovery.
Big opportunity: Mobile device security and management. Enterprises are not just worried about keeping viruses off smartphones and tablets but also locating lost one, remote wiping them and a host of other issues.
Big challenge: Symantec has been in a world of hurt for years. Last month it fired its CEO and vowed to do something about its languishing stock. It needs to find new growth markets, particularly with cloud computing, and dominate them.
Market cap: ~$13 billion
Teradata makes big data analytic software and hardware -- one time known as data warehousing.
Big opportunity: Teradata is in the sweet spot when it comes to big data and analytics. All of a sudden, every enterprise wants what Teradata has been doing for eons, so its always on the short list for big deals.
Big challenge: Tons of competition. Everyone is suddenly gunning for this market from general software vendors (Oracle, SAP) to hardware makers (HP, IBM) to Indian outsourcers (Wipro) to startups and new open source technologies like Hadoop.
Market cap: ~$14 billion
Seagate makes hard drives for enterprise storage systems as well as consumer devices.
Big opportunity: Solid state hard drives and high density drives. Seagate is working on technology that could allow a PC to store 60 terabytes of data.
Big challenge: We're moving to a post-PC world where people store less on their devices and more in the cloud -- and there are some amazing new startups working on large-scale flash storage devices to serve this new way of working. The hard drive's days may be numbered.
Market cap: ~$14 billion
Motorola Solutions sells radio systems, rugged computers and tablets. It also makes laser/imaging products and tracking systems based on RFID chips.
Big opportunity: Motorola Solutions is sitting pretty with tablets and ready to launch a Windows 8 rugged tablet as well as new devices on Android. The market for tablets has grown up around it.
Big challenge: That push-to-talk thing that Nextel did was based on Motorola's iDEN network. Sprint announced that it will be shutting down its iDen network, moving Nextel users to its CDMA network instead.
Market cap: ~$13 billion
Citrix offers software that lets enterprises turn PCs and other devices into 'thin clients' where applications and data are stored in the data centre not on the device itself
Big opportunity: Cloud software. Citrix is the lead company for an open source cloud operating system known as CloudStack. Citrix donated the software to the Apache Foundation as a counter move to a competing cloud operating system, known as OpenStack. OpenStack is very popular, but is operated by a foundation that has had its share of political scandals.
Big challenge: VMware is super hot right now and is challenging Citrix all over the place, from the desktop to the data centre.
Market cap: ~$16 billion
Adobe makes web development, graphic design and publishing software.
Big opportunity: Creative/drawing/design software for touch devices like Photoshop Touch and Adobe Pronto.
Big challenge: Moving itself into a SaaS, subscription model. People are less inclined to pay big bucks for Windows and Mac apps -- they want to rent these at lower costs over the Web. Adobe launched Creative Cloud in April to rent Photoshop and other graphics programs for monthly fees. But it will take years before it has enough subscribers to equal its software licence revenue today.
Market cap: ~$19 billion
Salesforce.com delivers customer relationship management software as a service and has recently launched into other areas including social marketing and HR apps.
Big opportunity: Social media analysis and marketing, and integrating this with its flagship CRM service. In June it paid $689 million to acquire Buddy Media.
Big challenge: Salesforce.com is no longer the little guy kicking Oracle and SAP's shins. Both competitors are now building out their own ERP/CRM clouds and coming into Salesforce.com's territory.
Market cap: ~19 billion
cognisant Technology Solutions is also an outsourcing company. cognisant has been doing extremely well recently, with growth that has outpaced rivals Infosys and Wipro.
Big opportunity: Social media and analytics, a big growth area that the company is now ramping up to pursue.
Big challenge: The outsourcing market, where work is shipped to India. Outsourcing is filled with competition. The company can't just talk about new growth areas. It has to find some and deliver.
Market cap: ~$20 billion
Wipro is an outsourcing company based in India.
Big opportunity: Cloud computing. In June Wipro opened iStructure, a cloud to compete with HP, IBM, Microsoft, Rackspace and others.
Big challenge: Competition is tough in the outsourcing sector and Wipro hasn't been winning a lot of new deals -- giving investors some worry. So it's trying to grow through acquisitions, promising to spend $1 billion on that.
Market cap: ~$22 billion
Dell makes PCs, servers and network equipment for the enterprise and has recently expanded into the services business, including winning a bidding war to buy Quest Software for $2.4 billion.
Big opportunity: Storage systems, particularly new systems built on flash technology. Dell just launched its own $60 million venture fund to back storage startups.
Big challenge: No matter how much Dell proclaims that it is no longer just a PC company, it's still extremely reliant on PCs. Sterne Agee analyst Shaw Wu estimates that 65%-70% of Dell's business is still tied to PCs.
Market cap: ~24 billion
Infosys is an outsourcing services company based in India.
Big opportunity: Business Process Outsourcing, where companies will turn over back office processes to another company such as human resources.
Big challenge: Company needs to show that it creates U.S. jobs, not takes them. There's some political pushback against using Infosys because of its reputation as a U.S. job killer. In fact, Infosys is embattled right now in a U.S. court case in which ex-employee whistleblower, Jack Palmer, claims Infosys violated U.S. immigration and tax laws by importing Indian employees into the U.S.
Market cap: ~ $38 billion
HP makes PCs, printers, servers, network equipment and sells IT management software, cloud services, and consulting services to enterprises.
Big opportunity: Cloud computing and from two directions. HP sells gear and services to enterprises building private clouds. HP also launched its own cloud, on a promising open source technology called OpenStack.
Big challenge: HP has been in a spiral of bad news for a decade. It needs to stop reorganising, get stable and come out with something innovative, particularly for its PC business.
Market cap: ~$40 billion
VMware makes something called virtualization software that lets companies run more applications on their servers. It's been so successful that its CEO, Paul Maritz will soon take a job as the chief strategy guy at parent company EMC. The EMC vice president in charge of the partnership with Cisco, Pat Gelsinger, will take over as CEO of VMware.
Big opportunity: Software defined networking. It just bought startup Nicira for $1.26 billion because this startup has technology that will do for networks what VMware's original software did for servers.
Big challenge: Cisco is not about to let VMware muscle in on its turf, enterprise networks.
Market cap: ~$56 billion
EMC is mostly known for its storage products but it's got other enterprise wares, too, like document management systems.
Big opportunity: VMware. EMC is the largest shareholder of VMware and it is arguably EMC's biggest asset. VMware makes software that helps companies pack more usage out of their servers. Now VMware dreams of doing the same thing for networks in a new market called software defined networking.
Big challenge: VCE, EMC's joint partnership with Cisco and VMware that sells Cisco and EMC hardware with VMware software. VMware is out to disrupt Cisco's world and EMC is in the middle.
Market cap: ~$77 billion.
SAP sells software, notably enterprise resource planning software, which includes finance, HR, sales and so on.
Big opportunity: It's hot in-memory database HANA, which has become one of the company's fastest growing products of all time. SAP just signed a partnership with Cisco and EMC to sell Cisco servers pre-loaded with HANA to enterprises.
Big challenge: Converting itself from a product oriented company to a cloud services company. SAP has invested billions buying cloud companies SuccessFactors and Ariba so it's definitely committing resources. But this is a major shift in how the company sells products and acquires customers.
Market cap: ~ 80 billion
Siemens is an electronics manufacturing powerhouse that makes gear for all kinds of huge special markets (energy, automotive, etc.). In the enterprise sector it is best known for telephone hardware and communications software, popular with call centres.
Biggest opportunity: It is a giant conglomerate with footholds in all the emerging new markets including green energy.
Biggest challenge: Siemens has been struggling of late. And its major telecommunications partnership is with a very troubled company, Nokia. The two operate the Nokia Siemens Network that sells telecom equipment to carriers and large enterprises.
Market cap: ~94 billion.
Cisco Systems makes network equipment but it also sells collaboration software and services like WebEx.
Big opportunity: Selling converged systems that include networking, servers and storage to enterprise data centres. Cisco just joined forces with EMC and SAP to sell SAP's popular HANA database pre-loaded onto Cisco servers. SAP's tens of thousands of customers should take notice.
Big challenge: Software defined networking which is a new technology that takes much of what Cisco gear does and turns it into a software app. Networks can then be run with cheaper, commodity network equipment. Cisco is working on two strategies to fight this, a secretive spin-in startup, and a plan to open its network operating system software up to app developers.
Market cap: ~154 billion.
Oracle is another jack-of-all trades enterprise company, offering hardware and software.
Big opportunity: Private clouds. Oracle wants to be known as the Apple of the data centre, offering all the pieces that companies need to make their data centres more efficient.
Big challenge: Sun Microsystems hardware built on the SPARC chip. Companies are moving away from expensive servers that run Unix (Solaris) for lower-cost Intel servers that run Linux.
Market cap: ~$229 billion
If an enterprise needs it, IBM makes it. The company sells servers, disks, storage, network gear, software for maintaining all of these things as well as software development tools, application server software and databases.
Big opportunity: Big data. No one has more sophisticated technology than IBM Watson, which is a machine that can use language (almost) as well as a person. Watson is being rolled out now for the medical industry, but has far broader applications.
Big challenge: Cloud computing. IBM was one of the early players selling cloud to the enterprises. A year ago, IBM claimed that 80% of Fortune 500 companies use IBM cloud. But cloud computing is still in its earliest stages and the competition for enterprise customers has ramped up significantly from companies like HP, Red Hat, Verizon and more.
Market cap: ~$254 billion.
Microsoft makes most of its money selling software to enterprises. It's Server and Tools division and Microsoft's Business division account for more than half of Microsoft's revenues and most of the company's profit.
Big opportunity in enterprise: Leading mid-sized enterprises into cloud computing, with cloud services like Office 365 and Azure.
Big challenge: Convincing companies that they should use Microsoft mobile devices and getting developers to write amazing enterprise apps for it's radically different new operating system, Windows 8.
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