Independent CRM software market share analysis ranking the top 5 CRM vendors.

Early SaaS adopters bought Salesforce applications. Latter-day salesforce automation implementers are buying Microsoft applications as cloud services.

That means Microsoft in the second quarter of 2016 took the leader's post ahead of Salesforce in the overall software-as-a-service market, according to John Dinsdale, director of research at the Reno, Nev., based Synergy Research Group.

Microsoft moved into that position powered mainly by its strength in selling collaborative SaaS software used in salesforce automation and elsewhere in the enterprise, such as Microsoft Dynamics CRM, Dynamics ERP, Dynamics AX, which includes accounting, inventory, HR, and other applications. The collaboration segment of SaaS grew at a 37% rate in the second quarter, or faster than the SaaS market as a whole, Synergy reported Sept. 1.

Why the divergence? One key factor is the business models that power these companies, venture capitalists say.

Advertising technology took off on the promise to automate the buying and targeting of ads across the web. Such companies have typically relied on “media-based” business models, whereby they collect revenue based on the volume of advertising they purchase and place on behalf of clients. They often sell to third parties in the ad ecosystem like marketers’ ad agencies, as opposed to the marketers themselves.

By contrast, many marketing tech companies have instead focused on selling software on a subscription basis, often directly to marketers. The recurring and relatively predictable software-as-a-service revenue model is often more attractive to investors because it’s less exposed to fluctuations in ad spending and other market dynamics.

Another consideration for early-stage investors is their potential exit. For many marketing and ad tech companies, the goal is to ultimately sell to a larger player. Terry Kawaja, chief executive of LUMA Partners, which has offered strategic advice to numerous advertising and marketing-related technology companies, said there’s a wider pool of potential buyers for marketing technology companies than for advertising technology ones. That makes them more attractive to venture capitalists.

View the 2016 CRM Market Leaders in each category listed below: 

• Enterprise CRM Suite
• Midmarket CRM Suite
• Small-Business CRM Suite
• Sales Force Automation
• Incentive Management
• Marketing Solutions
• Business Intelligence
• Data Quality
• Consultancies

After the post on 35 SaaS Marketing Products @ 1 Startup, a number of people asked me what products they used. While I don’t have the exact list of apps, here’s most of the free and paid apps the marketing department of the sub 100 person company uses...

This makes a lot of sense to me. Marketing operations was Aprimo’s original product and greatest competitive strength. It’s about as unsexy a business as you can imagine, and one that has mostly been merged into larger marketing suites by vendors like SAS, IBM, Adobe, SAP, Oracle, and Infor.  It has also been strangely divided between enterprise systems, like Aprimo’s, and specialists in distributed marketing (basically sharing assets with branch offices and channel partners such as distributors, agents, franchisees, etc.) such as Zift Solutions, BrandMuscle and Sproutloud. Revenew competes in the latter arena, so it’s a nice complement to Aprimo’s marketing operations features. In a conversation yesterday, Marlin and Aprimo management told me they hope that an offering that combines enterprise and distributed marketing operations management will be appealing to companies that now do them with separate systems.

The potential of a vertically-connected ecosystem in the digital channel is what makes Microsoft’s acquisition of LinkedIn so powerful. Although Microsoft has already had positions in all three stages of this channel, their primary strength was in client software (Windows, Xbox, Internet Explorer) and their secondary strength was in marketing software (Dynamics CRM, Office, Cortana). Their Internet services were a distant third, as Bing struggled against Google Search. They had no dominant exchange social media property.

Acquiring LinkedIn changes that. It will give Microsoft a very strong Internet service that is the dominant exchange of professional social networking. They will have star offerings in all three stages.

So what are the advantages of owning a vertically connected ecosystem? Here are a few:

• The relative redistribution of marketing spend across the different stages of the channel matters less if you’re earning revenue from all of them — in other words, vertical competition within your portfolio doesn’t harm you.
• You can leverage your products in one stage to boost the reach and value of your products in other stages (some regulation may apply). 
• The end-to-end visibility of prospects and customers across their client software, your Internet services, and marketers’ engagements with them through marketing software offers a much richer picture of customer insights. 

The computer-security company Symantec is buying Blue Coat Systems for about $4.65 billion in cash.

The deal follows a recent frenzy of acquisitions in the software industry. Large tech companies like IBM, Oracle, Ingram Micro, and Salesforce have purchased cloud computing startups this year.

Salesforce CEO Marc Benioff said that this year has been the "most intense M&A season" he's ever seen in an interview with CNBC's Jim Cramer on Wednesday.