27 Oct 2008

SaaS revenues to double by 2012, study finds

The market for software-as-a-service (SaaS) applications is forecast to reach $25 billion by 2012.

Representing a revenue increase of more than 100 per cent in the four-year period, SaaS adoption is expected to prove increasingly attractive to firms who are looking to cut costs within their technology infrastructures amid the effects of the economic downturn, the study by Gartner suggested.

The industry research group has also predicted cloud computing revenues to post a worldwide increase of 27 per cent by the end of this year.

Firms are able to take advantage of the cost-saving benefits of cloud computing after the availability of broadband increased significantly, Gartner noted.

Chris Pang, principal analyst for the group, said: "Initial concerns over security, response time and service availability have diminished for many organisations, as SaaS business and computing models have matured."

Cloud hosting and associated SaaS applications are in a stronger position in the IT market than ever before because they are well-suited to firms' current budget restrictions, wrote industry expert Oliver Marks in a blog at ZDNet earlier this month.