SaaS market will grow by 21% this year, says Gartner

Revenue for the worldwide software as a service (SaaS) market will grow by 21% in 2011, according to new research from Gartner.

The analyst company says the market will be worth $12.1 billion this year, up from $10 billion in 2010. It projected continued “healthy” growth in the market in the coming years, predicting a combined value of $21.3 billion by 2015.

Gartner’s VP of research, Tom Eid, said this growth was being driven as "tighter capital budgets demand leaner alternatives, popularity and familiarity with the model increases, and interest in platform as a service (PaaS) and cloud computing grows," Eid said.

Customer relationship management (CRM) was the largest market for SaaS, with the SaaS CRM with that market forecast at $3.8 billion in 2011. The market for SaaS-based content, communications and collaboration applications will be worth $3.3 billion of revenue in 2011.

Though software-as-a-service is generally considered a subset of cloud computing, Eid asserted only around 75% of SaaS offerings could be regarded as cloud services. The remaining 25% are too locally or vertically focused, or do not have scalability to be considered cloud offerings. However, the report added that the proportion of SaaS offerings that are cloud-based could reach 90% by 2015.

See also: Form over function – Software as a service continues to grow, but is application functionality keeping up with the times?

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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