In the last 10 years or so how we use software has changed significantly, inevitably now we use a lot of web based applications and our reliance on the number of apps that cater to Software as a Service (SaaS) has grown exponentially. And now a recent Gartner report has revealed that the worldwide SaaS revenue is expected to reach a more than impressive figure of $14.5 billion. So what exactly has propelled the SaaS market to such great heights in such a small time frame, well according to the Gartener report an increasing familiarity with the SaaS model, continued oversight on IT budgets, the growth of platform as a service (PaaS) developer communities and interest in cloud computing are now driving the adoption rate of SaaS enabled businesses and services forward. According to the report among all regional markets North America and more specifically the U.S. offers the largest opportunity for SaaS as it has shown the largest SaaS deployments in expense management, financials, emails and office suites.
Here’s a split of forecasted SaaS revenue in different regions of the world:
- In North America (primarily the U.S.A.) SaaS software revenue is forecast to total $9.1 billion in 2012, up from $7.8 billion in 2011.
- In Western Europe, SaaS revenue is forecast to surpass $3.2 billion in 2012, up from $2.7 billion in 2011, while SaaS revenue is Eastern Europe is projected to reach $169.4 million, up from $135.5 million last year.
- SaaS revenue in Asia/Pacific is on pace to reach $934.1 million in 2012, up from $730.9 million in 2011.
- SaaS revenue in Latin America is forecast to total $419.7 million in 2012, up from $331.1 million last year.
“After more than a decade of use, adoption of SaaS continues to grow and evolve regionally within the enterprise application markets” – Sharon Mertz, research director at Gartner.”
While the figures are promising and the adoption rates in most markets around the world are on the rise, it is interesting to note that Cloud based Computing is a term that is now associated with SaaS quite often. The reason being some of the world’s giant’s like Google and Facebook and some of the World’s most innovative and growing companies like Salesforce.com promote these two terms as if they are bringing about a paradigm shift in the way software is built and used today. And to say that they might be right is putting it mildly.
Right from the day Microsoft acquired the first real mainstream commercial SaaS application called Hotmail for $400 million in 1997, the SaaS market has shown tremendous potential to grow. Let’s face it today user’s have access to pretty much any type of software courtesy a modern web browser, and on most occasions this software doesn’t even cost them anything. There’s practically nothing to install and if the computer crashes they can restore it using backup copies in virtually no time at all. And this is what SaaS and Cloud based computing is all about. After all isn’t that the idea that drives Google’s ambitious Chromium project?
Look around you and you are likely to find a SaaS or Cloud based software somewhere close by. Gmail, Facebook, Google Chrome’s Web store, do these ring a bell? We can be rest assured that the Gartner report is bang on the money because SaaS applications have us all engaged.