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SaaS: Rapid Growth Continues
While most of the economy has been sputtering, there have been few bright spots, but SaaS is proving to be an exception. Gartner is predicting that SaaS spending will grow by 14.1 percent this year, compared to 2009. That jump compares with a more modest 3.9 percent increase that Garter is predicting for overall IT growth this year. Total spending on SaaS is expected to top $8.5 billion this year, compared to only $7.5 billion in 2009. The increase seems to be coming as a result of businesses gradually shifting their IT business models to the cloud. More businesses are moving their software and computing infrastructure to the cloud. SaaS services now represent about 10 percent of the total IT market.
Areas of SaaS that are seeing growth include project and portfolio management; content management and collaboration; and customer relationship management (CRM) software. Businesses are finding SaaS attractive because of the lower costs that SaaS offers, particularly for project startup and maintenance. Both large businesses and SMBs are increasing their use of SaaS.
Sharon Mertz, research director at Gartner said that “after a decade of use, adoption of SaaS continues to grow and evolve within the enterprise application markets. As tighter capital budgets demand leaner alternatives, familiarity with the model increases, and interest in SaaS and cloud computing grows.”
“Usage and vendors’ on-demand ‘ecosystems’ continue to evolve to provide additional business and technology services, more-vertical-specific functionality, and stronger communities of partners and buyer. Although some attrition occurred in 2009 due to business workforce reduction, nearly all SaaS vendors grew revenue, even during the economic downturn, as buyers continued to confirm their acceptance of on-demand. We certainly expect adoption of SaaS to far outpace market growth through 2014.”
