IDC predicts unparalleled SaaS revenue growth

Monday, July 26, 2010

A recent study undertaken by the International Data Corporation shows the Software-as-a-Service market has good times ahead.

The industry achieved a worldwide revenue of $13.1 billion in 2009 and is expected to grow at a 25.3 percent annual compound rate to reach a peak of $40.5 billion by 2014.

SaaS is gaining momentum and it’s been envisaged that fewer than 15 percent of net-new software firms will manufacture a packaged product in 2012. Two years after that, in 2014, 34 percent of all business software purchases will be through SaaS, IDC predicts.

According to Robert Mahowald, vice president for SaaS and cloud services research at IDC, the SaaS model has become mainstream and will dominate the planning of all software and services vendors in the future. “Enterprise IT plans are rapidly shifting to accommodate the growing choices for sourcing most or all IT software functions, from business applications to software development and testing, to service and desktop management, as SaaS services become available from established vendors and new models for accessing functionality in the cloud creates lower-cost options and more tailored models for consuming IT services”, he stated.