SaaS market to double inside four years

Gartner predicts market will swell from $10bn to $20bn by 2015

The software-as-a-service (SaaS) market is set to double in size to a global worth of more than $20bn (£12.5bn), Gartner has claimed.

The analyst is forecasting that worldwide SaaS revenue in 2011 will grow 20.7 per cent on last year to $12.1bn. By 2015 the global market will be worth $21.3bn, predicts Gartner.

CRM remains the largest sub-segment of the SaaS market, with sales predicted to rise nearly a fifth to $3.8bn in 2011. This would represent about a third of the value of the total CRM software market. Sales of content, communications and collaboration SaaS are set to grow at a similar rate this year to $3.3bn.

The SaaS market for enterprise resource planning (ERP) technologies is somewhat less mature, with worldwide sales set to rise 13 per cent to $1.7bn this year. Less than 10 per cent of the wider global ERP market can be attributed to SaaS sales.

Tom Eid, research vice president at Gartner, claimed many fears concerning the security and service availability levels of SaaS technology have been allayed over the years.

"After more than a decade of use, adoption of SaaS continues to grow and evolve within the enterprise application markets," he added. "This is occurring as tighter capital budgets demand leaner alternatives, popularity and familiarity with the model increases, and interest in platform-as-a-service and cloud computing grows."