SaaS and Virtualization have played a prominent role in the tech industry landscape for a while now, and the latest studies seem to show that they're going stronger than ever. In a CIOZone.com study that ranked the top-60 fastest-growing public software companies of at least $150 million in revenue in 2007, VMware lead the pack and Red Hat came in 12th place boasting a 33.6 percent growth rate.
Even more interesting is the role that SaaS seems to be playing in the success of some of these companies.All in all, public US software company revenue jumped 24% in 2007, from $122.3 billion to $151.4 billion, according to CIOZone's analysis. A prime factor credited for powering the growth of these companies is software that increases the efficiency of corporate data centers, or that runs as an Internet-delivered service.Virtualization Growing in ImportanceVMware, a front-running virtualization company was the fastest growing software company on CIOZone's list, proving the perceived importance of virtualization in the industry. The Palo Alto based company grew 88% to $1.3 billion as customers looked toward their virtualization solutions to help the servers in their data
centers tackle more computing tasks and applications.
According to analysts, virtualization is expected to be a play a more and more relevant role in companies that deal with significant amounts of computing power. Virtualization is praised for its ability to reduce costs, aid in business continuity and disaster recover, while critics site questionable vendor support, complexity, and security issues as possible downsides to the technology. Is SaaS the Key to Success? Indeed it was a good year for a lot of software vendors, but it was especially good for companies that have looked toward making their products available as online subscriptions, while phasing out the traditional install-and-maintain model. Salesforce.com, a pioneering company that turned customer relationship management into an online service saw 51% growth in 2007. Its competitor, NetSuite, grew 62% as well.
We are seeing SaaS models cropping up every increasingly in the Content Management and related industries. Many vendors are offering both versions of their product to ensure they are reaching the widest customer base possible.
According to the CIOZone, this is great for open source, as many SaaS vendors use open source technologies in their offerings in order to lower costs.
Read more about the the study or feel free to comment on the findings.