By Nathan Dukes
Worldwide SaaS revenue is expected to increase 18% this year compared to 2008, Gartner says.
Total revenue is forecast in the vicinity of US $7.5 billion this year, compared with US $6.4 billion in 2008.
The forecast figure has been downgraded from the $8 billion Gartner predicted in May this year.
In 2009, some of the largest market segments include Customer Relationship Management ($2.2 billion), Enterprise Resource Planning ($1.2 billion), and Supply Chain Management ($800 million).
Gartner said the market will show consistent growth through 2013, when worldwide SaaS revenue will total over $14 billion for the enterprise application markets.
Sharon Mertz, research director at Gartner, said the adoption of SaaS continues to grow and evolve within the enterprise application markets.
“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,” she said.
According to Gartner, the CRM market has been quick to take up the SaaS model.
Gartner said SaaS has been a key driver of growth in the CRM market for the past four years, climbing from less than $500 million in 2005 and over 8 percent of the CRM market to over 20 percent of the market in 2008, with nearly $1.9 billion in revenue.
Ms Mertz expects growth to continue. Gartner have predicted SaaS will represent almost 24 percent of the CRM market’s total software revenue in 2009.
“The market landscape for on-demand CRM continues to evolve as the availability and usage of SaaS solutions becomes more pervasive,” said Ms. Mertz.
“The rapid adoption of SaaS and the marketplace success of salesforce.com have compelled vendors without an on-demand solution to either acquire smaller niche SaaS providers or develop the solution internally in response to increasing buyer demand.”
“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,” Ms. Mertz said.
“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.”
