March 27, 2012 – Software as a service revenue will spike 17.9 percent this year compared with 2011, though the way it’s growing has taken an increasingly regional focus, according to a new Gartner market review.

Globally, Gartner has forecasted SaaS revenue to hit $14.5 billion in 2012, with continued growth over the next four years to an expected peak of $22.1 billion in annual revenue. Gartner defines this revenue as that which comes from new licenses, subscriptions and software maintenance and technical support in established SaaS markets.

North America maintains the largest and most mature SaaS market, with revenue anticipated to reach $9.1 billion in 2012 (up $1.3 billion from last year), and much of that comes from the U.S. But how North American and other regional adoptions are developing marks the real changes in the SaaS market. For example, at North American enterprises, the predominant focus of SaaS adoption has been to address customization constraints and limited integration with existing systems, and an accent on Web conferencing from its highly distributed workforce.

Conversely, SaaS is most often accessed to address network instability in enterprises in the Middle East and to cut down on “longer-than-expected deployments” by businesses in Asia and the Pacific. Western Europe is taking on SaaS adoption in-line with North America, though at a smaller scale, as U.S.-based as-a-service vendors make greater headway and more local vendors pop up. Latin America SaaS markets, driven by Brazil and Mexico, are expected to mature into the increased purchase of solutions and services in packaged customer relationship management, procurement and ERP applications over the next two years, Gartner stated.

In a news release on the report, Gartner Research Director Sharon Mertz said that, in general, global businesses share an interest in SaaS for horizontal applications among distributed virtual workforces and Web 2.0 collaboration and activities. However, Martz noted that the adoption of SaaS continues to “evolve regionally within the enterprise application markets.”

"Increasing familiarity with the SaaS model, continued oversight on IT budgets, the growth of platform as a service developer communities and interest in cloud computing are now driving adoption forward," said Mertz.

To access a copy of the report, “Forecast: Software as a Service, All Regions, 2010-2015,” click here.

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