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SaaS: Picking up the Pace in 2008
2007 was a great year for SaaS. There’s a stronger foundation of awareness and trust of on-demand delivery technology then there was a year ago today. In 2008 the momentum is expected to continue.
An IDC/Goldman Sachs study sees the “SaaS Potential Market” as greater than $100 billion in 2008. That’s an eye-popping number. And a bit of an exageration. It’s the sum of 100% of the current $24 billion client desktop application market and 75% of the enterprise application market, or about $65 billion. So, if SaaS can blow away nearly all competing traditional and emerging application delivery methods, then its “potential” is more than $100 billion. Seems a little bit rosy.
The report goes on to identify software that can best match the SaaS model. Good candidates of SaaS have characteristics like:
Applications that typically have their data outside the company firewall
The application audience is a widely dispersed workforce
Applications that require fee customizations
Applications that need little integration to other apps
Require little training
Are light on being computational intensiveness and time critical
Does that description cover 100% of all desktop apps and 75% of enterprise apps? Hardly…
SaaS is catching on quickly, but the optimism of the IDC estimate seems unlikely to happen soon.
Today SaaS makes up about 2% of all software sales and IDC expects to grow to about $21.4 billion by 2011.
But then, that’s still pretty healthy growth by all measures.
