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By Mel Duvall
Worldwide software-as-a-service (SaaS) revenues are expected to defy the tough economy and grow 18 percent in 2009, to reach $7.5 billion, research firm Gartner predicts.
Gartner says the SaaS market will show consistent growth through 2013, when worldwide revenues are expected to top $14 billion for the enterprise application markets.
"The composition of the worldwide SaaS landscape is evolving as vendors continue to extend regionally, increase penetration within existing accounts and 'greenfield' opportunities, and offer more-vertical-specific solutions as part of their service portfolio or through partners," Gartner research director Sharon Mertz said in a statement.
Mertz added that adoption of the on-demand deployment model has experienced strong growth as vendors like Salesforce.com extend their services through alliances, partner offerings, and by promoting user application development through a platform.
The content, communications and collaboration (CCC) market and the customer relationship management (CRM) market continue to capture the largest share of SaaS dollars. The CCC market is estimated to generate $2.6 billion in 2009, up from $2.14 billion in 2008. The CRM segment is estimated to garner $2.3 billion in 2009, up from $1.9 billion in 2008.
The CRM market has been a primary driver of the SaaS industry over the last four years, with revenues climbing from less than $500 million in 2005 to the $2.3 billion forecast for 2009. Gartner expects the strong growth to continue with SaaS representing almost 24% of the CRM market's total revenue in 2009.
"The rapid adoption of SaaS and the marketplace success of Salesforce.com have compelled vendors without an on-demand solution to either acquire smaller niche SaaS providers or develop the solution internally in response to increasing buyer demand," said Mertz.
The following are the top SaaS market segments for 2009:
1. Content, Communications and Collaboration (CCC) - $2.6 billion
2. Customer Relationship Management (CRM) - $2.3 billion
3. Enterprise Resource Planning (ERP) - $1.2 billion
4. Supply Chain Management (SCM) - $826 million
5. Office Suites - $68 million
6. Digital Content Creation (DCC) - $62 million
7. Other SaaS offerings - $472 million
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