07 Apr 2014

Software-as-a-service surges towards 15% of all app spending

Software as a service (SaaS) is growing at over 20 percent per year according to a new study by Forrester Research.

On its blog site, the researchers say that, “Traditional licensed, on-premise software has suffered, especially in the slow-growth economies of 2012 and 2013, but will revive in 2014, especially in Europe, Asia and emerging markets.”

They attributed the turnaround to “a combination of strong growth in new software categories and restored growth in older categories [that] will help make software the leading tech category.”

The US tech market is likely to be the big winner as it already has about 60 percent market share of SaaS and analytics spending.

“The revival of on-premise software will also be good news for IT consulting and systems integration services in 2014 – because SaaS leads to much less integration services spending than on-premises software,” say the researchers.

Gartner meanwhile provides further evidence of the strength of the SaaS market with a recent survey revealing almost three quarters of CIOs saying they were investing in the technology and that the primary driver was not cloud’s well-documented cost savings, but rather its ability to provide more agile environments.

The researcher believes that SaaS applications now account for up to 15 percent of application spending, and that its share is likely to grow strongly in the coming years due to the popularity of services such as Microsoft Office 365, Google Apps and Salesforce.com.