Wednesday, July 28, 2010

Worldwide SaaS Revenue Within the Enterprise Application Software Market to Surpass $8.5 Billion in 2010

Worldwide software as a service (SaaS) revenue within the enterprise application software market is forecast to surpass $8.5 billion in 2010, up 14.1 percent from 2009 revenue of $7.5 billion, according to Gartner, Inc. The rapid adoption of SaaS has contributed to growth in varying degrees across the enterprise software markets. There will be a shift in total SaaS revenue from just over 10 percent of the combined markets in 2009, to more than 16 percent of these combined markets in 2014.

Gartner defines SaaS as software that is owned, delivered and managed remotely by one or more providers. The provider delivers an application based on a single set of common code and data definitions, which is consumed in a one-to-many model by all contracted customers anytime on a pay-for-use basis or as a subscription based on use metrics.

During 2009 and 2010, the significant industry buzz surrounding SaaS and other off-premises models has shifted to cloud computing - a broad concept, of which SaaS is only one variation, representing the application layer of the overall cloud architectural stack. Gartner estimates that 75 percent of the current SaaS delivery revenue could be considered as a cloud service, and that could exceed 90 percent by 2014 as the SaaS model matures and converges with cloud services models.

Although use and adoption continues to grow, deployment of SaaS still varies between the enterprise application markets and within specific market segments because of buyer demand and applicability of the solution.

The project and portfolio management (PPM) SaaS market is rapidly growing in percentage of sales. SaaS alternatives may help to grow the overall PPM market again rather than cannibalizing on-premises sales; however, some SaaS revenue growth will be at the expense of on-premises license, as several new entrants to the market are able to provide solutions at less than the cost of maintenance on more mature solutions.

The content, communications and collaboration (CCC) market continues to show the widest disparity of SaaS revenue generation, with SaaS representing 4 percent of enterprise content management (ECM) and approximately 82 percent of Web conferencing in 2009.

SaaS continues to penetrate the customer relationship management (CRM) market, accounting for nearly 24 percent of total CRM market revenue in 2009. SaaS in CRM exhibits more-general market adoption, ranging between 11 percent and nearly 40 percent of total software revenue, depending on the CRM subsegment. SaaS is forecast to account for 26 percent of CRM market total revenue in 2010.

More information on SaaS can be found at

Monday, July 26, 2010

SaaS Revenue to Grow Five Times Faster Than Traditional Packaged Software Through 2014

A recent International Data Corporation (IDC) study shows that the Software as a Service (SaaS) market had worldwide revenues of $13.1 billion in 2009. IDC forecasts the market to reach $40.5 billion by 2014, representing a compound annual growth rate of 25.3%. By 2012, IDC expects that less than 15% of net-new software firms coming to market will ship a packaged product (on CD). By 2014, about 34% of all new business software purchases will be consumed via SaaS, and SaaS delivery will constitute about 14.5% of worldwide software spending across all primary markets.

Additional key findings from IDC's latest SaaS research include the following :

-- By 2012, nearly 85% of net-new software firms coming to market will be built around SaaS service composition and delivery; by 2014, about 65% of new products from established ISVs will be delivered as SaaS services.

-- SaaS-derived revenue will account for nearly 26% of net new growth in the software market in 2014.

-- Traditional packaged software and perpetual license revenue are in decline and IDC predicts that a software industry shift toward subscription models will result in a nearly $7 billion decline in worldwide license revenue in 2010. As a result, a permanent change in software licensing regime will occur.

-- SaaS segment mix will shift toward infrastructure and application development and deployment/PaaS, and away from U.S. dominance. IDC expects that by 2014, applications will account for just over half of market revenue. This shift will happen in part as a result of increasing IT cloud spending by enterprise IT groups and commercial cloud services providers (cloud SPs) relative to end-user spending.

More information on SaaS can be found at

Wednesday, July 21, 2010

Study: Cloud Computing Confidence Expected to Drive Economic Growth

The flexibility of cloud computing could help organizations recover from the current global economic downturn, according to 68 percent of IT and businesses decision makers who participated in an annual study commissioned by Savvis, Inc., a provider of cloud infrastructure and hosted IT solutions for enterprises.

A lack of access to IT capacity is clearly identified as a barrier to business progress, with 76 percent of business decision makers reporting they have been prevented from developing or piloting projects due to the cost or constraints within IT. For 55 percent of respondents, this remains an issue.

Global research highlights indicate that:

-- Confidence in cloud continues to grow – 96 percent of IT decision makers are as confident or more confident in cloud computing being enterprise ready now than they were in 2009.

-- 70 percent of IT decision makers are using or plan to be using enterprise-class cloud within two years.

-- Singapore is leading the shift to cloud, with 76 percent of responding organizations using cloud computing. The U.S. follows with 66 percent, with the U.K. at 57 percent.

-- The ability to scale resources up and down in order to manage fluctuating business demand was the most cited benefit influencing cloud adoption in the U.S. (30 percent) and Singapore (42 percent). The top factor driving U.K. adoption is lower cost of total ownership (41 percent).

-- Security concerns remain a key barrier to cloud adoption, with 52 percent of respondents who do not use cloud citing security of sensitive data as a concern. Yet 73 percent of all respondents want cloud providers to fully manage security or to fully manage security while allowing configuration change requests from the client.

-- Seventy-nine percent of IT decision makers see cloud as a straightforward way to integrate with corporate systems.

More information on cloud computing can be found at

Monday, July 19, 2010

Survey: Businesses Missing Out on Social Media Opportunities

Companies failing to use social media to reach their customers and employees do so at their own peril, according to a new study on the importance of social media in business and customer communications.

The study, conducted by research firm Yankee Group and commissioned by Siemens Enterprise Communications, finds that the vast majority of employees and consumers would prefer to use social networking for business communications.

The study showed average customer satisfaction with current business interactions via social media is just 65 percent, and that one third of businesses have no formal social networking policies, do not allow the use of social media at work or aren't aware of their company's participation in social networking.

Survey highlights include:

-- Seventy percent of consumers want access to company experts and support via social media channels and trust company information provided to them via their social networks

-- Nearly 60 percent of customers feel company outreach via social media would improve their loyalty to that company

-- Most customers feel that companies should be monitoring social media for customer feedback

-- Fifty percent of respondents use social media daily or several times a day

-- Nearly 70 percent of employees feel they need better tools to track and manage social media for business, and would like the ability to initiate a Web conference automatically from a chat discussion at work, inviting people from within their social and work networks

More information on CRM can be found at

Wednesday, July 14, 2010

Research finds almost half of transactions occur within one day of the email receipt

Experian Marketing Services announced the release of new research from its email marketing technology, Experian CheetahMail, indicating that almost half (47 percent) of transactions and three-quarters of opens and clicks occur within one day of the email receipt. Findings from the study specify customer response time variances by industry and offer, confirming the volatility in customer preferences and instantaneous nature of the email channel today.

The research was conducted in March 2010 by Experian CheetahMail’s Strategic Services group, to look at email response times in more depth and to find where variability may occur. Email performance was analyzed for 44,011 mailings from 404 industry-diverse clients in increments of one, three and seven days from send.

Response times for transactions and revenue were found to vary by industry. The research data showed that companies in the Business Products and Services vertical tend to have the quickest customer response, with 52 percent of transactions and 79 percent of revenue received in the first day. In comparison to all other industries, Travel was the slowest with only 13 percent of transactions and 11 percent of revenue occurring on day one.

The research also finds that transactions and revenue response times can significantly vary by mailing type and subject line content. Using time-limited offers in subject lines shows the quickest response time of all, with 59 percent of transactions in day one, while coupons demonstrate much slower response, with only 36 percent of transactions the first day. Abandoned-cart emails generate quick transaction responses with 52 percent received on day one, while also generating higher revenue per email in the long term. Welcome email recipients appear to require more time to make purchases, with only 33 percent of transactions occurring the first day.

More information on CRM can be found at

Monday, July 12, 2010

Americans Will Spend 9% More With Companies That Provide Excellent Service

economic environment (61%) and will spend an average of 9% more when they believe a company provides excellent service. However, in a challenging economy where growth is harder to achieve, many businesses are missing out on this opportunity. Although only a little more than a third of Americans (37%) believe that companies have increased their focus on providing quality service:

-- 27% feel businesses have not changed their attitude toward customer service.

-- 28% say that companies are now paying less attention to good service.

These findings were released in the American Express Global Customer Service Barometer, a survey conducted in the U.S. and eleven other countries exploring attitudes and preferences toward customer service.

Not surprisingly, nine in ten Americans (91%) consider the level of customer service important when deciding to do business with a company. But only one-quarter (24%) believe companies value their business and will go the extra mile to keep it. Most feel businesses can do more to retain their loyalty:

-- 48% feel companies are helpful but don't do anything extra to keep their business.

-- Worse, 21% believe that companies take their business for granted.

Importantly, customers are spreading the word willingly and widely when they experience good service. In fact, contrary to conventional wisdom, customers are more inclined to talk about a positive experience than complain about a negative one. Three-quarters (75%) are very likely to speak positively about a company after a good service experience in contrast with 59% who are very likely to speak negatively about a company after poor service.

Good service experiences also carry more weight than bad ones when Americans make future spending decisions. Consumers are far more likely to give a company repeat business after a good service experience (81%) than they are to never do business with a company again after a poor experience (52%).

In fact, consumers say the three most influential factors when deciding which companies they do business with include personal experience (98%), a company's reputation or brand (92%), and recommendations from friends and family (88%).

Nearly half (48%) of consumers report always or often using an online posting or blog to get others' opinions about a company's customer service reputation. But when consumers go online they're looking for "watch outs," saying they put greater credence in negative reviews on blogs and social networking sites than on positive ones (57% and 48%, respectively).

A negative service experience is an important factor for most Americans: 81% have decided never to do business with a company again because of poor customer service in the past. When asked how many poor experiences they allow, half of all Americans (50%) reported it takes two poor service experiences before they stop doing business with a company.
Importantly, consumers are far more forgiving if a company has earned their trust over time. Almost nine-in-ten consumers (86%) report they're willing to give a company a second chance after a bad experience if they've historically experienced great customer service with that company.

But companies who get it wrong should realize it's at a cost.

-- Half of consumers (52%) expect something in return after a poor customer service experience, beyond resolving the problem.

-- Most consumers (70%) want an apology or some form of reimbursement.

In most countries where the highest percentage of consumers feel that service is more important today, there is a corresponding belief that companies have increased their focus on providing good customer service:

-- 65% of Indian, 49% of Japanese and 47% of Mexican consumers agree with this statement.

However, some consumers are not feeling the love. In Australia (71%), Germany (66%), and Canada and Italy (65% each), consumers say they feel companies haven't increased their focus on service or are paying less attention to it.

More information on customer service can be found at

Sunday, July 4, 2010

Three-Quarters Of Online Retailers Are Dialing Up Mobile Strategies

Consumers' increasing appetite for mobile applications is driving online retailers to speed up their mobile marketing initiatives. According to a Forrester Research, Inc. study produced in partnership with, nearly three-quarters (74 percent) of online retailers either already have or are developing a mobile strategy. One in five boasts having a fully implemented mobile strategy in place already. The survey of 109 companies is part of The State of Retailing Online research series, which provides eBusiness professionals with an annual industry benchmark for marketing and business investment and activities.

Earlier this year, Forrester forecast US online retail sales to total $173 billion in 2010. According to "The State Of Retailing Online: Marketing, Social Commerce and Mobile Report," Web retailers with mobile strategies:

--Are investing in features that support the cross-channel experience. Product and price information, store information, and coupons to support the in-store experience are among the most popular features that retailers are offering consumers.

--Have varied levels of investment. On average, respondents anticipated spending $170,000 on their mobile sites this year, large multichannel retailers are spending several times that amount, while smaller online pure plays on average are investing much less.

-- Are experiencing modest gains. Retailers reported that their mobile browsers at this juncture are generating a little less than 3 percent of overall site traffic and just 2 percent of revenue.

Tried and true marketing tactics such as paid search, email, and affiliate marketing command the biggest percentage of an online retailers' marketing budget. According to the report, retailers are spending nearly 40 percent of their marketing budget on paid search.

Retailers are finding value in social media marketing, but the ROI for driving online sales remains murky. Listening to customers is the most significant objective for social tools according to respondents, with 80 percent of retailers reporting that they are pursuing social strategies to experiment and learn. And while 28 percent noted that social marketing has helped grow their business, direct sales from social tactics are not widely measured.

More information on CRM can be found at