SaaS Spending Continues To Make Sense
Although it doesn’t contradict that the enterprise software market overall is in a state of gloom and doom, an IDC report released on Monday indicates that one segment of the software market is likely to come out of the downturn stronger than it went in: software-as-a-service (SaaS) — also known as hosted or on-demand software.
“With a broad slowdown across IT sectors, businesses are increasingly bearish about their short-term ability to invest…” said Robert Mahowald, director of on-demand and SaaS research at IDC. “But SaaS services have benefited by the perception that they are tactical fixes which allow for relatively easy expansion during hard times, and several key vendors finished the year very strong.”
Among IDC’s findings: Seventy-six percent of U.S. businesses will use at least one SaaS-delivered application by the end of this year. And the proportion of U.S. firms that spend a quarter (or more) of their IT budget on SaaS applications is expected to rise from 23 percent last year to 45 percent next year.
