Worldwide software-as-a-service (SaaS) revenue in the enterprise application markets* is on pace to surpass $6.4 billion in 2008, a 27 per cent increase from 2007 revenue of $5.1 billion, according to Gartner, Inc. The market is expected to more than double with SaaS revenue reaching $14.8 billion in 2012.
Gartner analysts said the adoption of SaaS is growing and evolving within the enterprise application markets as new entrants challenge incumbents, popularity increases, and interest for platform as a service grows.
Some of the key industry trends that contribute to the rapid growth of SaaS globally include businesses examining ways to reduce their IT capital expenditure budget, the increased availability of broadband which extends the viability of Web-based service solutions globally, and the demand from businesses to rapidly implement software which supports a specific business need.
The fastest-growing markets for SaaS are office suites and digital content creation (DCC), albeit from small bases. Gartner estimates that the revenue attributed to SaaS within the office suites market will reach 99.2 per cent compound annual growth rate (CAGR) from 2007 through 2012, with a total SaaS revenue reaching $1.9 billion in 2012. By 2012, Gartner estimates that web-based freeware such as Google Apps, Adobe Buzzword, ThinkFree, Zoho and SaaS offerings will account for 9 per cent market share of total software revenue. These offerings will coexist with traditional office products, such as Microsoft Office and complement the way individuals work today.
Gartner forecasts that the revenue attributed to SaaS in DCC market will be 96.1 per cent CAGR from 2007 through 2012
The content, communications and collaboration (CCC) markets remains the largest contributor to the overall SaaS enterprise application markets with revenue exceeding $2.1 billion in 2008, and it is expected to amount to $4.7 billion in 2012. It also shows the widest disparity of SaaS revenue generation, with SaaS representing 2 per cent to 3 per cent of enterprise content management (ECM) and more than 70 per cent of Web conferencing in 2007.
The second largest contributor to the overall SaaS enterprise application markets is customer relationship manager (CRM). In 2008, SaaS within the CRM industry is expected to exceed $1.7 billion in total software revenue. Gartner expects CRM SaaS revenue to exceed $3.2 billion in total software revenue in 2012.More information on the Customer Relationship Management can be found at http://www.crmindustry.com/