This entry was posted by Jim O'Farrell on July 27, 2010 at 4:14 pm under IT News.

IDC recently reported SaaS applications will grow to more than $40 billion in revenue by the end of 2014 after the market surpassed $13 billion in 2009. The report also stated that the compound annual growth rate for SaaS application will be more than 25 percent between 2010 and 2014, accounting for the lofty figures.

By the end of 2014, more than one-third of all software purchases will be SaaS applications as more companies move to the cloud and leading software providers develop cloud-based applications to go along with their on-premise applications.

"The SaaS model has become mainstream," said Robert Mahowald, vice president for SaaS and cloud services research at IDC. "Enterprise IT plans are rapidly shifting to accommodate the growing choices for sourcing most or all IT software functions, from business applications to software development and testing, to service and desktop management, as SaaS services become available from established vendors."

Global market research firm Gartner reported last week that SaaS will create more than $8 billion in revenue for vendors by the end of 2010, which represents a 14 percent growth compared to 2010 when the industry collected $7.5 billion in revenue. While the numbers differ from IDC’s report to Gartner’s, it’s clear SAP data management solutions are headed to the cloud at the right time.