Worldwide SaaS Revenue to Increase 18 Percent in 2009 According to Gartner

According to the folks over at Gartner, Inc., one of the leading information technology research and advisory companies, worldwide SaaS (Software as a Service) revenue is predicted to reach $7.5 billion in 2009. If Gartner’s forecast is correct, this would show a 17.7 percent increase, as 2008 SaaS revenue totaled at $6.4 billion. Gartner also reports that the market will display significant and steady growth through 2013, at which point revenue is anticipated to extend past $14 billion for enterprise application markets.

Research director Sharon Mertz said of the projections, “The adoption of SaaS continues to grow and evolve within the enterprise application markets. The composition of the worldwide SaaS landscape is evolving as vendors continue to extend regionally, increase penetration within existing accounts and ‘greenfield’ opportunities, and offer more-vertical-specific solutions as part of their service portfolio or through partners.” Mertz continued to explain how the on-demand deployment model has flourished because of the broadening of on-demand vendors’ services through partner offerings, alliances and (recently) by offering and promoting user-application development through PaaS (Platform as a Service) capabilities. Added Mertz, “Although usage and adoption is still evolving, deployment of SaaS still varies between the enterprise application markets and within specific market segments because of buyer demand and applicability of the solution.”

Across market segments, the largest amount of SaaS revenue comes from CCC (content, communications and collaboration) and CRM (customer relationship management) markets. Gartner reports that the CCC market is generating $2.6 billion and the CRM market is generating $2.3 billion, in 2009. The CCC and CRM markets generated $2.14 billion and $1.9 billion in 2008, respectively. See Table 1 for figures.

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Growth in the CRM market continues to be driven by SaaS, a trend which began four year ago, as evidenced by the jump from less than $500 million and over 8 percent of the CRM market in 2005 to nearly $1.9 million in revenue and over 8 percent of the CRM market in 2008. Gartner anticipated this trend to continue, with SaaS representing nearly 24 percent of the CRM market’s total software revenue in 2009. Says Gartner’s Mertz in conclusion, highlighting the need in the marketplace filled by SaaS, “The market landscape for on-demand CRM continues to evolve as the availability and usage of SaaS solutions becomes more pervasive. The rapid adoption of SaaS and the marketplace success of salesforce.com have compelled vendors without an on-demand solution to either acquire smaller niche SaaS providers or develop the solution internationally in response to increasing buyer demand.” To receive more information contact Nubifer today.

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