25% of New Business Software Will Be Delivered As Software As A Service by 2011
Software
as a service (SaaS) represented approximately 5% of business software
revenue in 2005 and, by 2011, 25% of new business
software will be delivered as SaaS, according to Gartner.
According to a recent IDC study, the size of the SaaS market will grow from $2.3 billion in 2003 to $8.0 billion by 2007. Other studies cite similar numbers and refer to an annual growth rate of 25%. SaaS offerings currently take one of three different forms: managed services, hosted applications, and software-on-demand.
Salesforce.com is a dominant player in the the software-as-a-service movement. Salesforce.com is halfway to a million subscribers and a billion dollars in revenue, according to the company's Q2 2007 financial report. Some detailed by sector at Billion dollar SaaS sectors.
SaaS is hosted software based on a single set of common code and data definitions that are consumed in a one-to-many model by all contracted customers, at any time, on a pay-for-use basis, or as a subscription based on usage metrics. SaaS providers are enhancing their software functionality and improving the ease with which companies can customize and more uniquely configure SaaS software to meet business requirements.
