Gartner says worldwide software as a service revenue Is forecast to grow 21 percent in 2011

Worldwide software as a service (SaaS) revenue is forecast to reach $12.1 billion in 2011, a 20.7 percent increase from 2010 revenue of $10 billion, according to Gartner, Inc.

The SaaS-based delivery will experience healthy growth through 2015, when worldwide revenue is projected to reach $21.3 billion.? 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.??

“After more than a decade of use, adoption of SaaS continues to grow and evolve within the enterprise application markets,” said Tom Eid, research vice president at Gartner. “This is occurring as tighter capital budgets demand leaner alternatives, popularity and familiarity with the model increases, and interest in platform as a service (PaaS) and cloud computing grows.”?

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, added Eid.

Greg Holt, Director of Product Marketing, CombineNet, Inc., told SCMR in an interview that when it comes to sourcing and procurement, technologies that were once viewed as applicable primarily to complex events are proving powerful in the everyday scenario.

“In fact, as CombineNet grows and tracks its data, it finds that its customers increasingly rely on its expressive bidding solution for sourcing scenarios that may have previously been the domain of more basic sourcing technologies,” he said.

Gartner estimates that 75 percent of current SaaS delivery, as measured by revenue, could be regarded as cloud services, and this could exceed 90 percent by 2015 as the SaaS model matures and converges with cloud service models.??

Customer relationship management (CRM) continues to be the largest market for SaaS. SaaS revenue within the CRM market is forecast to reach $3.8 billion in 2011, up from $3.2 billion in 2010. Gartner expects SaaS to represent nearly 32 percent of the CRM market’s total software revenue in 2011.?

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