SaaS is a growing market

Posted on June 9, 2009 by cfrassi

Last December, a study from Gartner anticipated the trends for SaaS in 2009. More than one third of respondents (37%) planned to replace on-premises software with SaaS to drive down total cost of ownership. The primary reasons for this change in sourcing strategy were cost-effectiveness and ease of deployment.

Six months later, a new report from Gartner announces that the market for Software as a Service (SaaS) is forecast to reach $8 billion in 2009, a 21.9 percent increase from 2008 revenue of $6.6 billion, and will experience a 19.4 percent compound annual growth rate through 2013. According to IDC the expected growth is even higher: 40.5% over 2008.

According to both studies, the economy downturn has a role in the recent success of SaaS. Sharon Mertz, research director at Gartner says: "The adoption of SaaS continues to grow and evolve within the enterprise application markets as tighter capital budgets in the current economic environment demand leaner alternatives, popularity increases, and interest for platform as a service and cloud computing grows.”
Robert Mahowald, On-Demand and SaaS research director at IDC, is convinced that SaaS services have benefited by the perception that they are tactical fixes which allow for relatively easy expansion during hard times.

These statements remind me of what I wrote about the Eleven Strategies that will make you thrive through the downturn.

Crises give the opportunity to review our habits, to build new processes and cut inefficiencies; during hard times we are more likely to accept change and innovation. I’m pretty sure that some good effects will result from this recession. SaaS adoption will prove itself to be one of them.