This past August, we posted a blog that outlined some of the reasons Software as a Service (SaaS) has become so popular in recent years and, in doing so, we debunked many of the myths that are commonly held about SaaS, such as it is more expensive than on-premises software and is inferior in the key areas of security and data backup.
Further evidence of the progress being made by SaaS applications is a recent Forbes article that outlines information from an IDC report written by Christine Dover, Research Director, Enterprise Applications and Digital Commerce Research with IDC's Software Business Solutions Group. The report states that “by 2018, 27.8% of the worldwide enterprise applications market will be SaaS-based, generating $50.8 billion in revenue, up from $22.6 billion or 16.6% of the market in 2013.”
In her report, Worldwide SaaS Enterprise Applications 2014–2018 Forecast and 2013 Vendor Shares, Dover says: “Demand for SaaS enterprise applications is accelerating and exceeding the demand for on-premises applications by five times (during the five-year forecast period from 2014 through 2018, SaaS revenue is forecast to grow at 17.6% Compound Annual Growth Rate [CAGR], while on-premises revenue growth is only forecast at 3.1%). Generally, wherever new enterprise application software is required, the expectation is that SaaS applications are preferred, particularly for customer relationship management and enterprise resource management applications. However, most of the enterprise software currently in use today and in the near future remains on-premises, particularly in the areas of supply chain, manufacturing, and engineering.”
Forbes offers seven key takeaways from Dover’s report, which primarily consist of them outlining the expected SaaS growth in several key enterprise application market segments by 2018. All of this data illustrates that SaaS is expected to continue its growth over the next half decade and slowly loosen the stranglehold that on-premises software has traditionally maintained in this space. This data reaffirms our position that cloud-based technology offers the most robust overall solution and deserves serious consideration for any enterprise content management solution, such as accounts payable or accounts receivable automation. If you would like to know why SaaS is making so many strides in this market, check out our recent blog "5 Reasons SaaS Beats On-Premises Software."