Gartner Says SaaS Revenue To Top $12 Billion in 2011; Up 20% 
SaaS (software as a service) revenue is expected to top $12 billion worldwide by the end of the year, up more than 20% in just one year, according to estimates from Gartner Inc. SaaS adoption will continue to explode for the next three years, at least, Gartner added, when worldwide revenue till top $21 billion, the firm added.
Gartner Inc. predicts that revenues from software as a service (SaaS) will reach $12.1 billion worldwide in 2011, up 20.7% from $10 billion in 2010. In fact, the news gets better, as SaaS spending will continue to grow through at least 2015, when worldwide revenue is forecast to reach $21.3 billion, the firm added.
“After more than a decade of use, adoption of SaaS continues to grow and evolve within the enterprise application markets,” said Tom Eid, research vice president at Gartner, in a statement.
SaaS will be increasingly in the mix of options as companies look for what Eid called “leaner alternatives in order to save money.” In addition, the SaaS model is becoming more popular, enterprises are becoming more familiar with it and interest in PaaS (platform as a service) and cloud computing is also increasing, he added.
"Adoption of SaaS continues to grow and evolve within the enterprise. "
Tom Eid
Research Vice President
Gartner Inc.
The largest market for SaaS is still CRM (customer relationship management) with SaaS revenue in CRM market expected to reach $3.8 billion in 2011, up from $3.2 billion in 2010, according to Eid, who said he expects SaaS to represent nearly 32 percent of the CRM market's total software revenue in 2011.
"The market landscape for on-demand CRM continues to evolve and mature as the availability and use of SaaS solutions become more pervasive," Eid added. "Greater market competition and increased focus on mega vendors reinforce the legitimacy of on-demand solutions, mitigating initial objections about security and availability for many, as acceptance of SaaS as a viable model for enterprise computing services grows."
In addition, organizations are not as concerned about security, response time and service availability as SaaS business and computing models have matured and adoption has become more widespread, he said.
SaaS revenues for CCC (content, communications and collaboration) markets are also on the rise, with revenues set to surpass $3.3 billion this year (up from $2.8 billion in 2010), he added.
As for ERP (enterprise resource planning), SaaS revenues account for about 7% of the overall ERP market, or $1.5 billion of the SaaS market in 2010.
