Like it or not, we’re getting SaaSy

As most of us have figured out by now, SaaS is here to stay. Just in case you had any doubts, both IDC and Gartner issued reports this week chronicling the recent double-digit gains in the marketplace that we’ll continue to see for the foreseeable future.

ReadWriteWeb does a good job of wrapping-up the reports, but here are some of the more interesting findings from IDC:

  • The SaaS market had worldwide revenues of $13.1 billion in 2009; these revenues will reach $40.5 billion by 2014.
  • In 2010, worldwide license revenues will drop by $7 billion.
  • By 2012, about 85% of new software to the market will be delivered as a service.
  • By 2014, revenues from SaaS services will account for nearly 26% of net new growth in the software market.

..And from Gartner:

  • Worldwide SaaS revenue within the enterprise application software market is forecast to surpass $8.5 billion in 2010, up 14.1 percent from 2009 revenue of $7.5 billion.
  • There will be a shift in total SaaS revenue from just over 10 percent of the enterprise software market in 2009, to more than 16 percent of the market in 2014.
  • SaaS is forecast to account for 26 percent of CRM market total revenue in 2010.

Despite the fact that the IT industry is clearly moving in the direction of software-as-a-service, it’s important to remember that we’re not there yet. Issues ranging from bandwidth, to uptime, to security concerns are rightfully giving enterprise IT managers pause before adopting an all-out SaaS strategy. These issues will likely be resolved over time, allowing most, if not all systems to be hosted in the cloud. But for now, it’s important to remember that you have options. Think carefully, and do what’s right for you and your business.