Gartner: Enterprise SaaS market to break $10bn in 2011

Global enterprise SaaS revenues set to grow 16 per cent in 2010 and 2011

The global enterprise software-as-a-service (SaaS) market will swell by 15.7 per cent to $9.2bn in 2011, as enterprises’ lingering concerns over security and service levels continue to subside, according to Gartner.

The market watcher also said SaaS deployments are becoming larger, with deals often now covering tens of thousands of users.

Gartner defines SaaS as software that is owned, delivered and managed remotely by one or more providers.

It stressed that SaaS is only one variation of cloud computing, representing the application layer of the overall cloud architectural stack.

The enterprise SaaS market will expand by a further 16.2 per cent in 2011 to stand at $10.7bn, Gartner predicted.

Sharon Mertz, research director at Gartner, said: “Initial concerns about security, response time and service availability have diminished for many organisations as SaaS business and computing models have matured and adoption has become more widespread.

“Usage and vendors' on-demand ecosystems continue to evolve to provide additional business and technology services, more vertical-specific functionality, and stronger communities of partners and buyers.”

Content, communications and collaboration (CCC) will remain the largest SaaS segment this year with a worth of $2.9bn, said Gartner, with CRM following closely on $2.6bn.

However, Gartner noted that SaaS adoption remains patchy across the CCC sector, with the model hardly being used at all for enterprise content management and search.