26 Jan 2009

SaaS market "will expand"

Businesses subscribing to software-as-a-service (SaaS) will accelerate the technology's growth in spite of the economic climate, according to experts.

A study, including a survey and customer interviews by industry body IDC, has revealed that companies are more likely to opt for easy-to-use subscription services than on-site applications.

Robert Mahowald, director of on-demand and SaaS research at IDC, believes the service offers a solution to firms who are "bearish to invest" in the short term.

"SaaS services have benefited by the perception that they are tactical fixes which allow for relatively easy expansion during hard times and several key vendors finished the year very strong, reporting stable financials and inroads into new customer-sets," he says.

The study found that over three-quarters of US organisations plan to use SaaS in 2009 and IDC has accordingly increased its year-on-year growth projection for the service from 36 per cent to 42 per cent for the coming 12 months.

IDC's findings follow recent comments by Richard Mowbray outlining the cost effectiveness of SaaS solutions.