United States Dominates SaaS
Gartner: software as a service global market to see a 20.7 percent increase to $12.1 billion this year.
Insurance Networking News, September 16, 2011
The number one market for SaaS is North America, specifically the U.S., and Gartner Inc. sees adoption picking up in other regions as well.
Increasing familiarity with the SaaS model, IT budgeting, the growth of platform as a service developer communities and cloud computing are now driving interest and adoption, according to Gartner.
The analyst firm’s regional SaaS forecast research shows that North America will account for 63.6 percent of revenue in 2011. By the end of 2015, North America's share will represent 60.8 percent of worldwide SaaS revenue. Worldwide SaaS revenue is on pace to reach $12.1 billion in 2011, a 20.7 percent increase from 2010 of $10 billion, according to Gartner analysis.
Gartner research director Sharon Mertz says that reasons for adopting SaaS vary by region and what people are adopting vary by region. Buyers, too, vary by region, as in some sectors where executives lead the way and others where IT is in control, says Mertz.
Total cost of ownership is a driver in Europe, Middle East and Africa, while ease and speed of deployment is a primary reason behind SaaS in Asia/Pacific and North America. The top issues encountered when deploying SaaS also vary by region. Limited flexibility of customization is a top issue in EMEA, while limited integration to existing systems is the primary reason in North America and Asia/Pacific.
Mertz says: “After three surveys, we’ve discovered that many companies do not have governance policies in place for procuring and deploying SaaS.” Mertz says consistently fewer than 40 percent of BI companies have a governance policy in place. This can create problems in that “unless they’re using SaaS as a one-off solution, over time they have to incorporate with backend systems. So, buyer complaints about integration requirements are very significant.”
Mertz offers insights for IT managers. “Try to be involved up front. If IT can get involved in decision-making processes with line-of-business support up front, it can help to avoid some of the problems we’re seeing downstream.”
Based on demand, Gartner does regional forecasts using their worldwide SaaS forecast, surveys of user adoption patterns, reports of colleagues in the regions, and through vendor tracking. Additional information is available in the Gartner report "Forecast: Software as a Service, All Regions, 2010-2015."
This article was used with permission from Information Management.
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