Mar 20 2006

SaaS making headway

Allen Bernard in, in an article SaaS Making Headway (Again), writes about the growing acceptance of the Software as a Service (SaaS) model as the likes of IBM, Microsoft, SAP and Oracle throw their weight behind the approach.

He quotes some high-flying hype from an IBM press release "Pacific Crest predicts the SaaS market will grow at 25% per year through 2010 and AMR Research shows that 78% of survey respondents are either currently using SaaS or plan to in the near future."

A lot of the revenues will, however, come from IBM and others pushing the model forwards – "the pure-play market of SaaS providers — those companies whose business models are based on selling subscriptions to hosted solutions — is really only $70 to $100 million in revenue per year." … "The pure plays have no way to drive the market that big, into the billions of dollars," but "when the big companies say this is a trend that has legs, it gives the market some momentum. … if these companies are saying it’s a good thing, then it must be safe for customers to dive in here."

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