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Follow UsBANGALORE, INDIA: Worldwide software-as-a-service (SaaS) revenue within enterprise application software market will
total $10.7 billion in 2011, which is a 16.2 percent increase from 2010 revenue, finds analyst firm Gartner.
Gartner also expects that global SaaS revenue will reach $9.2 billion in 2010, which is almost a 15.7 percent jump from 2009 revenue that was $7.9 billion. Moreover, Gartner expects that global SaaS revenue will total $10.7 billion in 2011, which is again a 16.2 percent increase from 2010 revenue.
"Initial concerns about security, response time and service availability have diminished for many organizations as SaaS business and computing models have matured and adoption has become more widespread," said Sharon Mertz, research director, Gartner.
"There is increasing involvement from executives in purchasing decisions, as well as greater participation from IT in the purchase process due to larger deals, the expanding footprint of SaaS in the enterprise, and a higher requirement for downstream integration as SaaS becomes incorporated in the enterprise business process," Mertz added.
Gartner also finds that an increasing number of enterprises are using a variety of SaaS applications from multiple vendors that were procured and deployed without participation from IT, creating management issues and challenges.
SaaS deployments are becoming larger, with deals more frequently appearing in the range of thousands to tens of thousands of users within large enterprises.
Content, communications and collaboration (CCC) continues to lead the enterprise SaaS market with worldwide CCC revenue set to reach $2.9 billion in 2010, followed by customer relationship management (CRM) revenue, which is expected to touch $2.6 billion.
On contrary to a recent report that SaaS solutions buyers are not so interested in social softwares, Gatner finds that social media and social software are becoming increasingly integrated with SaaS solutions. This is so because social platforms such as Facebook and Twitter are levearaging customer service, sales and marketing initiatives.
Adoption of SaaS in CRM market also varies within each subsegment. Majority of SaaS total software revenue within the sales subsegment is represented by sales force automation, where benefits of rapid time to deployment and ease of configuration for sales administrators make it an attractive alternative to on-premises solutions.
Interest has been growing for e-commerce SaaS solutions in business-to-consumer environments, although some buyers express concerns about a potential lack of differentiation, impact on the total IT portfolio, integration challenges with on-premises applications, and uncertainty over data ownership (client data versus aggregated data).