ISVS SEE BOTH OPPORTUNITY AND CHALLENGES IN THE EXPANSION OF THE SOFTWARE AS A SERVICE MARKET.
Independent software vendors (ISVs) – which have traditionally built, packaged, sold, distributed and updated software in the form of licensed, on-premise applications – have made significant progress in adopting Software as a Service (SaaS) delivery models in the last five years. Most now offer software in both licensed, on-premise and SaaS versions, and the overall growth of the SaaS market illustrates the extent of that transition.
Research company IDC is forecasting that 27.8% of the global enterprise applications market will be SaaS-based by 2018. This is set to grow at a compound annual growth rate (CAGR) of 17.6 % and generate revenue of $50.8bn, with SaaS the preferred option for customer relationship (CRM) and enterprise resource management (ERM) applications.
Rival analyst house Forrester expects even more spectacular expansion, predicting that global SaaS revenue will see a CAGR of 20% to be worth $106bn in 2016, with SaaSbased desktop applications experiencing the most growth year on year. Other SaaS software which has seen widespread adoption by business customers to date include accounting and financial packages, project management tools, communication and collaboration software, web hosting and e-commerce platforms and Human Resources (HR) applications. This trend is supported by IDG Connect’s findings: Over 59% of respondents said they already lease software under some form of public cloud, pay as you go delivery model, and a further 31% offer hosted, managed services either directly to customers or via partnerships with other providers.