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The Software as a Service (SaaS) market will grow 16.8 percent to $16.7 billion in 2013 and reach $21.3 billion by 2015, based on a report from Siemer & Associates. Drivers for SaaS growth are what the report calls “smart computing” and the desire to improve collaboration across all users, even those outside the corporate firewall.
Some of the findings of the Siemer report include:
- About 60 percent of the SaaS market is based in the US, while concerns about security, third party control and lack of bandwidth are holding back growth in Asia and Latin America.
- Collaboration is the fastest growing SaaS vertical
- Mergers and Acquisitions in the SaaS space are expected to reach $25 billion over the next 20 months
- SaaS businesses are outperforming enterprise and security software businesses. Median SaaS stock growth reached 13 percent, compared to 9 percent for Enterprise and Security stocks
- By 2015, mobile application development will exceed PC projects by a factor of four
The report notes that some types of applications like CRM and Human Capital Management are a great fit for the SaaS model since these types of applications often need to scale size and accommodate remote users. But application types like PLM tend to not need to scale users, and users tend not to use the software remotely.