IDC: SaaS Revenue to Grow Five Times Faster Than Traditional
IDC: SaaS Revenue to Grow Five Times Faster Than Traditional
0 Comments | Wireless News, Jul 29, 2010
A recent International Data Corporation (IDC) study shows that the Software as a Service (SaaS) market had worldwide revenues of $13.1 billion in 2009.
IDC further noted in its report that its forecasts the market to reach $40.5 billion by 2014, representing a compound annual growth rate of 25.3 percent. By 2012, IDC said it expects that less than 15 percent of net-new software firms coming to market will ship a packaged product (on CD). By 2014, about 34 percent of all new business software purchases will be consumed via SaaS, and SaaS delivery will constitute about 14.5 percent of worldwide software spending across all primary markets.
“The SaaS model has become mainstream, and is 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, SaaS and Cloud Services research at IDC. “Enterprise IT plans are shifting to accommodate the growing choices for sourcing most or all IT software functions, from business applications to software development and testing, to service and desktop management, as SaaS services become available from established vendors and new models for accessing functionality in the cloud creates lower-cost options and more tailored models for consuming IT services.”
Additional findings from IDC’s latest SaaS research include:
-By 2012, nearly 85 percent of net-new software firms coming to market will be built around SaaS service composition and delivery; by 2014, about 65 percent of new products from established ISVs will be delivered as SaaS services.
-SaaS-derived revenue will account for nearly 26 percent of net new growth in the software market in 2014.
-Traditional packaged software and perpetual license revenue are in decline and IDC predicts that a software industry shift toward subscription models will result in a nearly $7 billion decline in worldwide license revenue in 2010. As a result, a permanent change in software licensing regime will occur.
-SaaS segment mix will shift toward infrastructure and application development and deployment/PaaS, and away from U.S. dominance
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