The global SaaS market is set to reach $14.5bn (£9bn) this year, according to the latest Gartner figures, representing a 17.9 per cent increase compared with 2011.
The analyst predicted the market will reach $22.1bn by 2015, with the most widespread use still characterised by horizontal applications with common processes.
Sharon Mertz, research director at Gartner, said: “After more than a decade of use, adoption of SaaS continues to grow and evolve regionally within the enterprise application markets. 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 forwards.”
She added that the top issues when deploying SaaS vary by region. “Limited flexibility of customisation 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,” she said.
“Vendors are more aggressively pursuing SaaS buyers outside traditional markets by offering local-language availability, forming alliances and constructing datacentres to accommodate local requirements.”
Breaking the figures down, SaaS revenue in Western Europe is forecast to reach more than $3.2bn in 2012, up from £2.7bn in 2011, while SaaS will reach $169.4m in Eastern Europe, up from $135.5m in 2011.
The analyst claimed this is because SaaS adoption is running at two speeds. In Western Europe, which is the most developed region, SaaS offerings and adoption rates are rapidly increasing as North America-based SaaS vendors further penetrate the region and the number of local vendors also increase.
In Eastern Europe, the Middle East and Africa – usually small and emerging markets – the potential opportunity for SaaS is in the medium to long term as ongoing infrastructure challenges first need to be overcome.
In Asia Pacific, SaaS revenue is set to reach $934.1m this year, up from $730.9m in 2011. Finally, SaaS revenue in Japan is forecast to reach $495.2m, up from $427m in 2011, led mainly by demand for CRM and email/groupware.
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