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Changing of the guard in the IT software market, says IDC
IT News |
28/07/2010
The global Software-as-a-Service (SaaS) market is set to grow at five times the rate of traditional packaged IT solutions between now and 2014, it has been predicted.
According to the latest forecast from industry analyst IDC, the market is set to expand from a value of £8.4 billion in 2009 to £30 billion within just five years.
This expected compound growth rate of 25.3 per cent offers clear insight into the direction being taken by the IT software market, with vendors' traditional business models coming under severe pressure from managed services.
IDC says that by 2014, 34 per cent of all new business software purchases will be consumed via SaaS, and online delivery will account for 14.5 per cent of worldwide software spending across all primary markets.
Almost all new businesses (85 per cent) entering the IT software market are set to be SaaS-focused by 2012, the report indicated, and by 2014, just 35 per cent of new products delivered by established vendors will come as packaged software.
Overall, the SaaS market is forecast to account for 26 per cent of net new growth in the software market by the middle of this decade, as perpetual licence software declines in favour of subscription-based delivery.
Robert Mahowald, vice-president for SaaS and cloud services research at IDC, noted that the SaaS model has become mainstream and is quickly coming to dominate the planning of all software and services vendors.
This incorporates a variety of areas, including research and development, sales quotas, partnering, channels and distribution, he suggested.
"Enterprise IT plans are rapidly shifting to accommodate the growing choices for sourcing most or all IT software functions - from business applications to software development and testing, to service and desktop management, as SaaS services become available from established vendors," Mr Mahowald added.
He said that new models for accessing functionality in the cloud are creating lower-cost options and more tailored models for the consumption of IT services.
Earlier this month, Gartner predicted a 14 per cent increase in global SaaS spending between 2009 and 2010 as more firms look to access hosted services through a third-party provider.
Posted by Jon Aspinell
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