This entry was posted by Jim O'Farrell on July 26, 2010 at 4:54 pm under IT News.

SaaS applications provide organizations with a highly capable and less expensive alternative to on-premise solutions. These are among the reasons that global adoption of SaaS applications will exceed the $8.5 billion mark in revenue this year, according to market research firm Gartner.

The figure represents a 14 percent spike in earnings compared to 2009 totals of approximately $7.5 million. Enterprise adoption of cloud computing has increased rapidly as companies learn it’s not only a method of saving money but of increasing efficiency in spending and man-hours. Most major software vendors have opted to create cloud systems, including SAP which recently released hosted SAP data management solution BusinessByDesign to leverage the trend into greater earnings.

"The popularity of SaaS has increased significantly within the past five years and initial concerns about security, response time, and service availability have diminished for many organizations as SaaS business and computing models have matured and adoption has become more widespread," Cheryl Mertz, Gartner research director, said.

An earlier report from Gartner found SaaS applications have helped companies so well, the renewal rate for subscriptions will be 95 percent in 2010.