Gartner seeing huge adoption of software-as-a-service
Market hits $7.5 billion in revenue in 2009
By Jon Brodkin on Tue, 11/10/09 - 12:08pm.
Customer interest in cloud-based software applications is soaring, with software-as-a-service revenues set to reach $7.5 billion in 2009 – an increase of nearly 18% over last year, according to new research from Gartner.
I don’t find the numbers too surprising – but the success of software-as-a-service is in stark contrast to many other portions of the recession-plagued IT industry.
Worldwide, software-as-a-service revenue will continue growing, totaling over $14 billion in enterprise application markets by 2013, according to Gartner.
“Adoption of the on-demand deployment model has continued to grow as on-demand vendors have extended their services through alliances, partner offerings, and more recently, by offering and promoting user application development through platform as a service (PaaS) capabilities,” Gartner analyst Sharon Mertz says in a press release. “Although usage and adoption is still evolving, 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 biggest chunk of SaaS revenue is going to content, communications and collaborations applications, which are set to pull in $2.6 billion in revenue in 2009. Customer relationship management tools came in second with $2.3 billion.
Interest in software-as-a-service is coming at the expense of hardware vendors. IDC recently reported an 18% drop in worldwide revenue for external disk storage systems. And if customers continue to adopt software-as-a-service en masse, they will have even less need to buy expensive storage and server systems.
Add it all up, and it looks like the IT market is turning into a SaaS world.
- About Head in the cloud
- Jon Brodkin is a senior writer for Network World covering cloud computing and virtualization. He is also an avid Red Sox fan.
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Response
Jon – It’s exciting to see both SaaS revenues and SaaS adoption increasing with the emergence of cloud computing, although I wonder just how much the cloud has factored into SaaS’ success. Our clients, which include virtually every industry including financial services and life sciences, have been relying on our SaaS solution for cross-company collaboration for more than a decade. Now, with cloud computing catching on, I’m more interested to see how the industry evolves to support global collaboration between different organizations and, hence, different clouds. I’ll also be watching to see how different vendors will address the stringent security and reliability requirements demanded by Fortune 500 companies given some of the recent, and highly publicized, outages. I touch upon some of these topics in my recent blog post (http://blog.intralinks.com/blog/2009/11/11/collaboration-architecture-building-security-and-performance-akamai). – John Landy, CTO, IntraLinks
Of course, Gartner said the same thing a few circa the bubble
Didn't make it happen, though.
Good insight
Short your hard drive manufacturers stocks :) SaaS and PaaS will only get bigger and more open as evidenced by the emerging Open Platform as a Service http://www.openplatformasaservice.com
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