SaaS Expected to Grow Despite Numbers

Among the successful Software as a Service (SaaS) providing companies in the industry are Salesforce.com, NetSuite, and Google Apps. The major benefit of SaaS is its reduced cost for everyone involved, so what’s holding back the SaaS market from getting bigger? According to Gartner, the worldwide SaaS revenue this year is expected to be at only $12.3 billion; a drop in the bucket when compared to the $267 billion in worldwide software revenue, and “At 10 years old, or 10 years young – however you want to specify its age – SaaS has the power to change everything. It should be viral, like a really hilarious YouTube video, and it just isn’t. Why not?” asks Jason Currill, the CEO of Ospero, a VMware cloud startup in the UK.

Sharon Mertz, Gartner research director, believes two things are curbing the widespread use of SaaS in North America; the lack of customization of multi-tenant cloud apps and the scarcity of real impeccable integration between SaaS and the on-premise systems. “This kind of stitching together of composite applications is going to make customers living with their current systems reconsider what future applications driving their businesses are going to look like.” says Robert Mahowald of the International Data Corporation (IDC). Let’s face it, for a lot of businesses a change in applications can be downright frightening, but let’s see if the SaaS’s performance in the public cloud domain can warm any cold feet.

Let the Numbers Do the Talking:

Despite SaaS’s integration snags and its less than awesome expected annual growth, it is growing. IDC asserts that the worldwide SaaS market revenue will rise to $53.6 billion by 2015 at an annual growth rate of 26%. Taking into account cloud apps, system infrastructure software, and application development and deployment, SaaS is expected to dominate the public cloud services realm, by representing a whopping 73% of the revenue.

So, even though SaaS providers and services may still have some growing to do, it is worth getting on board now because of the tremendous push for all online date management. I mean, have you seen the new MacBook Pro? (No optical drive?!) Truth be told, online software for accounting, project management, collaboration, customer relationship management and much, much more is becoming commonplace and soon, the need for a software disk will be obsolete.

What do you guys think? Will SaaS become the “norm” anytime soon? Can it leverage your business’s potential to be more productive and more connected? Speak up, we’re all ears.

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