The global market for Software as a Service (SaaS)may grow by 27% globally in 2008, according to a new report from Gartner, Inc. Expectations are that the 2008 figure will finish above $6.4 billion in 2008, 27%higher than 2007’s revenue of $5.1 billion. By 2012, the SaaS revenue result could more than double to $14.8 billion.
Sharon Mertz, research director at Gartner, noted, “The popularity of the on-demand deployment model has increased significantly within the last four years. Initial concerns over security, response time, and service availability have diminished for many organizations as SaaS business and computing models have matured and adoption has become pervasive . . . Although the sales sub-segment still represents the largest contributor to SaaS revenue, demand is increasing for marketing automation and customer service and support solutions
Driving the growth are office suites and digital content
creation (DCC), which are starting from pretty low levels.
“Gartner estimates that the revenue attributed to SaaS within the office
suites market will reach 99.2 per cent compound annual growth rate (CAGR) from
2007 through 2012, with a total SaaS revenue reaching $1.9 billion in 2012 . . .
. Revenue attributed to SaaS in DCC
market will be 96.1 per cent CAGR from 2007 through 2012.”
“The content, communications and collaboration (CCC) markets remains the largest contributor to the overall SaaS enterprise application markets with revenue exceeding $2.1 billion in 2008, and it is expected to amount to $4.7 billion in 2012,” the report says.
Gartner observes that customer relationship management (CRM) is the next biggest driver of revenue growth. The company believes, “In 2008, SaaS within the CRM industry is expected to exceed $1.7 billion in total software revenue. Gartner expects CRM SaaS revenue to exceed $3.2 billion in total software revenue in 2012”
Chris Pang, principal analyst, cautions, “Before IT leaders embark into deploying SaaS, they need to determine where SaaS is most appropriate and advantageous within the organization’s overall sourcing and applications strategy. It is also important that they identify the costs incurred with a SaaS solution to establish whether SaaS is the better choice.”
The report is available here:
http://www.gartner.com/DisplayDocument?ref=g_search&id=757431&subref=simplesearch
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