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SaaS: Cloud Vendors Grow Quickly as SaaS and Cloud Popularity Increase

By Dick Weisinger

SaaS companies are seeing an average growth rate of 44 percent in 2011, higher even than 2010 which had an annual growth rate of  40 percent.  And 30 percent of SaaS business are seeing growth rates greater than 60 percent.  Those are statistics from the 13th Annual Pacific Crest Global Technology Leadership Forum held at Vail in early August and posted by Evangelos Simoudis, Managing Director at Trident Capital.

Other highlights described by Simoudis include:

  • SaaS vendors in the $10-25M revenue range are currently growing the fastest, at an average rate of 75 percent
  • 60 percent of corporate budgets for software acquisition are earmarked for SaaS and Cloud Computing with 50 percent targeted towards applications.
  • CRM and Business Intelligence continue to be the two main first applications used by customers starting out with SaaS
  • 16 percent of applications used by businesses today are SaaS.  Over the next year, that number will reach 17 percent.
  • SaaS sales are typically made to a line of business rather than to IT, but this is changing, especially for Fortune 1000 companies.
  • SaaS customers are increasingly asking SaaS vendors to benchmark their data and application use compared to their peers.
  • SaaS purchases are typically done by annual contract, but multi-year contracts are becoming more common
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