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SaaS: Recession Fueling Acceptance Across Industries
While not everyone’s definition of SaaS is the same, the general consensus is that the market is a healthy one and growing rapidly. IDC clocks the growth of SaaS at 26 percent annually through 2014. Using a different technique for measurement, MarketWatch.com estimates that SaaS grew at a rate of 17 percent throughout 2009 and is on a path to exceed $25 billion by the year 2013.
All this growth in SaaS though is coming at the expense of traditional software licensing. IDC estimates that perpetual licensed software dropped $7 billion in 2009. And customers are looking to SaaS when considering any changes in their current software lineups. IDC is finding that in-house ERP projects are being hit badly — many upgrades of existing software are being delayed or simply cancelled. Less than 20 percent of new software purchases are targeting in-house data centers.
Right now 71 percent of the SaaS market is located in the United States, but that is expected to change rapidly as global uptake for SaaS appears strong. Acceptance of SaaS seems to be fairly consistent across a broad range of industries. One survey found as many as half of secondary schools and colleges are using SaaS. Another survey found about a third of health care practitioners are adopting SaaS too.
But despite the move to SaaS, 26 percent of companies remain unconvinced and have no plans to try it. Somewhat surprisingly, that number increases to 40 percent when small companies with less than 100 employees are considered.
