Worldwide Software as a Service Revenue Expected to Reach $14.5 Billion in 2012

Worldwide software as a service (SaaS) revenue is forecast to reach $14.5 billion in 2012, a 17.9 percent increase from 2011 revenue of $12.3 billion, according to Gartner, Inc. SaaS-based delivery will experience healthy growth through 2015, when worldwide revenue is projected to reach $22.1 billion.

"After more than a decade of use, adoption of SaaS continues to grow and evolve regionally within the enterprise application markets," said Sharon Mertz, research director at Gartner. "Increasing familiarity with the SaaS model, continued oversight on IT budgets, the growth of platform as a service (PaaS) developer communities and interest in cloud computing are now driving adoption forward."

Although growing interest has been observed in vertical-specific software, the most widespread use is still characterized by horizontal applications with common processes, among distributed virtual workforces and within Web 2.0 activities.

"The top issues encountered when deploying SaaS vary by region," Ms. Mertz said. "Limited flexibility of customization and limited integration to existing systems are the primary reasons in North America. In EMEA, network instability is the issue most frequently encountered, whereas longer-than-expected deployments are the top issue in Asia/Pacific. Vendors are more aggressively pursuing SaaS buyers outside traditional markets by offering local-language availability, forming alliances and constructing data centers to accommodate local requirements."