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SaaS Keeps Growing in the Enterprise Application Market

July 23, 2010 –  Worldwide software as a service revenue within the enterprise application software market is forecast to surpass $8.5 billion in 2010, which is up 14.1 percent from 2009, according to Gartner, Inc. The rapid adoption of SaaS has contributed to growth across the enterprise software markets.

During 2009 and 2010, the significant industry buzz surrounding SaaS and other off-premises models has shifted to cloud computing - a broad concept of which SaaS is one variation, representing the application layer of the overall cloud architectural stack. Gartner estimates that 75 percent of the current SaaS delivery revenue could be considered as a cloud service, and that could exceed 90 percent by 2014 as the SaaS model matures and converges with cloud services models.

"As tighter capital budgets demand leaner alternatives, familiarity with the model increases, and interest in platform as a service and cloud computing grows," said Sharon Mertz, research director at Gartner in a statement.

Initial concerns about security, response time, and service availability issues surrounding SaaS have diminished, according to Gartner findings, as business and computing models have matured and adoption has become more widespread.

"Although some attrition occurred in 2009 due to business workforce reduction,” said Mertz, “nearly all SaaS vendors grew revenue, even during the economic downturn, as buyers continued to confirm their acceptance of on-demand. We certainly expect adoption of SaaS to far outpace market growth through 2014."

Details are available in the Gartner report "Forecast Analysis: Software as a Service, Worldwide, 2009-2014.”

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