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SaaS industry now worth US$12.1-billion — Gartner

Software as a service (SaaS) has changed the way we’re using computers, with the applications and services we use increasingly moving online. People are checking their email online, doing their word processing online, and even running their entire businesses online.

This service is worth billions and by the end of 2011, will be worth even more according to a report from research house Gartner. In fact, the research firm’s statistics suggest SaaS is now worth US$12.1-billion. By 2015, North American shares of SaaS will have dropped from 63.6 percent to 60.8 percent. This is as a result of the growing global market in regions such as New Zealand, Hong Kong, South Korea and Singapore.

SaaS issues vary from region to region, with the American and Asia-Pacific markets complaining about limited integration with existing systems. Europe, the Middle East and Africa are restricted in their flexibility.

Sharon Mertz, a Gartner researcher says, “Increasing familiarity with the model, continued oversight on IT budgets, and the growth of platform as a service (PaaS) developer communities and interest in cloud computing are now driving adoption forward. Usage varies within markets, regions and countries, and the reasons for adopting SaaS vary by region. Total cost of ownership (TCO) is a primary driver in Europe, Middle East and Africa (EMEA), while ease and speed of deployment is the key reason for choosing SaaS in Asia/Pacific and North America.”

Breaking it down by geographical market reveals the figures of projected SaaS revenue for 2011:

North America — US$7.7-billion, or an 18.7 percent increase. By 2015, a possible US$12.9 billion is predicted. The US represents a region which is both fast and easy to deploy SaaS. Web conferencing, e-learning, CRM and travel booking are highly utilised in the US SaaS environment.

Western Europe — US$2.7-billion, or a 23.3 percent increase since 2010.

Eastern Europe — US$131.4-million, a 29.8 percent increase and a possible US$270.1 million in 2015. Regions such as Ireland, the UK and the Netherlands succeed with SaaS thanks to a “culturally open outlook towards technological adoption.” It is also easier for “local vendors in one country to adapt and sell their applications in other Northern European countries with less localisation effort”.

Asia-Pacific — US$768.3-million by 2011, a 27.7 percent increase. By 2015, the forecast is US$1.7-billion. “SaaS adoption is more prominent in the more mature markets in Asia/Pacific, such as Australia, New Zealand, Hong Kong, Singapore and South Korea, because of their established infrastructure, such as more-stable networks, as well as the availability of vendor sales, marketing and support service structures.

Japan — US$379-million by 2011 and future earnings of US$629.1 million by 2015. “SaaS demand in Japan will grow for sales force automation solutions to improve reaction to customers, while demand for marketing analysis solutions will also be higher.”

South America — US$328.4-million by 2011, US$694.2 million by 2015. The analysts at Gartner see this as a growing market still in the embryonic stages, yet this is a burgeoning region which shows much promise.

Author | Steven Norris

Steven Norris
Steven Norris is a born writer, living in Claremont, Cape Town and educated in the ways of graphic design but destined to follow in the footsteps of the worlds greatest authors. He has had many years of experience as an SEO copywriter, learning the ropes the hard way before... More