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 http://www.crmindustry.com/
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