SaaS market defies economic gloom

Gartner says SaaS revenue is likely to reach $8.11 billion by end of 2009.

The global software-as-a-service (SaaS) market has grown by about 18 percent in revenue since last year, according to analyst firm Gartner.

The market for on-demand software is likely to reach US$7.5bn (AU$8.06 billion) by the end of this year, the analyst firm said. Last year, revenue totalled US$6.4 billion (AU$6.88 billion).

The most popular on-demand software is for content, communications and collaboration (CCC) and customer relationship management (CRM) applications, Gartner's figures show, generating sales that are expected to be worth nearly US$5 billion (AU$5.37 billion) by the end of this year.

Gartner predicts global sales of SaaS-based enterprise applications will be worth more than US$14 billion (AU$15.05 billion) by 2014.

Gartner analyst Sharon Mertz said, “The composition of the worldwide SaaS landscape is evolving as vendors continue to extend regionally, increase penetration within existing accounts and ‘greenfield’ opportunities, and offer more vertical-specific solutions as part of their service portfolio or through partners.

“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.”