Gartner Says Worldwide SaaS Revenue to Grow 18 Percent in 2009

STAMFORD, Conn., November 9, 2009 — 

Worldwide software as a service (SaaS) revenue is forecast to reach $7.5 billion in 2009, a 17.7 percent increase from 2008 revenue of $6.4 billion, according to Gartner, Inc. The market will show consistent growth through 2013 when worldwide SaaS revenue will total over $14 billion for the enterprise application markets.

"The adoption of SaaS continues to grow and evolve within the enterprise application markets,” said Sharon Mertz, research director at Gartner. “The composition of the worldwide SaaS landscape is evolving as vendors continue to extend regionally, increase penetration within existing accounts and ‘greenfield’ opportunities, and offer more-vertical-specific solutions as part of their service portfolio or through partners.”

“Adoption of the on-demand deployment model has continued to grow as on-demand vendors have extended their services through alliances, partner offerings, and more recently, by offering and promoting user application development through platform as a service (PaaS) capabilities,” Ms. Mertz said. “Although usage and adoption is still evolving, deployment of SaaS still varies between the enterprise application markets and within specific market segments because of buyer demand and applicability of the solution.”

The content, communications and collaboration (CCC) market and the customer relationship management (CRM) market continue to have the largest amount of SaaS revenue across market segments, with the CCC market generating $2.6 billion in 2009, up from $2.14 billion in 2008 and the CRM segment generating $2.3 billion in 2009, up from $1.9 billion in 2008. (see Table 1).

Table 1
Worldwide Software Revenue for SaaS Delivery Within the Enterprise Application Software Markets
(Millions of Dollars)

	2009	2008
Content, Communications and Collaboration (CCC)	2,573	2,143
Office Suites	68	56
Digital Content Creation (DCC)	62	44
Customer Relationship Management (CRM)	2,281	1,872
Enterprise Resource Planning (ERP)	1,239	1,176
Supply Chain Management (SCM)	826	710
Other Application Software	472	387
Total Enterprise Software	7,521	6,388

Source: Gartner (November 2009)

SaaS has continued to represent a key driver of growth in the CRM market for the past four years, climbing from less than $500 million in 2005 and over 8 percent of the CRM market to over 20 percent of the market in 2008, with nearly $1.9 billion in revenue. Gartner expects growth to continue, with SaaS representing almost 24 percent of the CRM market’s total software revenue in 2009.

“The market landscape for on-demand CRM continues to evolve as the availability and usage of SaaS solutions becomes more pervasive,” said Ms. Mertz. “The rapid adoption of SaaS and the marketplace success of salesforce.com have compelled vendors without an on-demand solution to either acquire smaller niche SaaS providers or develop the solution internally in response to increasing buyer demand.”

Additional information is available in the Gartner report “Market Trends: Software as a Service, Worldwide, 2008-2013, Update.” The report is available on Gartner’s Web site at http://www.gartner.com/resId=1221513.

Contacts:


Christy Pettey
Gartner
+1 408 468 8312
christy.pettey@gartner.com

Holly Stevens
Gartner
+44 0 1784 267412
holly.stevens@gartner.com


About Gartner:
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.