IDC predicts SaaS market to grow substantially faster than packaged software
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07/26/2010
Business consumers’ demand for SaaS will continue to grow, fueling that segment of the cloud services industry to reach $40.5 billion in revenue by 2014, IDC reports.
The report found within the next four years, 65 percent of new products from established independent software vendors will be delivered as SaaS services, with the increased focus on SaaS helping the sector account for nearly 26 percent of new net growth in the software market.
“The SaaS model has become mainstream, and is quickly coming to dominate the planning - from R&D, to sales quotas, to partnering, channels and distribution - of all software and services vendors,” said Robert Mahowald, vice president of SaaS and cloud services research at IDC.
The rise of SaaS will result in the decline of traditional packaged software, as IDC forecasts companies’ move toward subscription software will levy a $7 billion hit on worldwide license revenue in 2010.
Companies are increasingly choosing SaaS and cloud computing applications to reduce long-term expenses and gain more flexibility in their business operations. Instead of paying for large quantities of packaged software, which can remain unused and wasteful as staff sizes change, SaaS enables businesses to pay for software as they need it.
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