No matter which research paper you look at, one thing all of them agree on is that the global SaaS market is booming and will see continued growth for at least another three years. The drivers behind that growth vary depending on your perspective. New research from Siemer says that SaaS is being pushed by “smart computing” and the need for enterprises to push collaboration outside the firewall.
SaaS Globally 2013
Smart computing in this context, Siemer says, includes apps which provide direct access to data used in the enterprise decision making process which dovetail with SaaS offerings currently available from vendors. It also offers mobile workers direct remote access to work-enabling data.
The overlap happens, the report says, because the browser-based access model for SaaS applications is enabling easy, secure contact across the firewall with third-party users. In doing so, it provides business opportunities that wouldn’t be available with behind-the-firewall deployments.
Entitled Summer 2013 SaaS Industry Report from Siemer & Associates — an investment company that provides advice on funding and raising funds for IT companies — the 64-page report offers a view of the SaaS market from a financial perspective.
Though the report focuses on financial information, there are also considerable insights into the SaaS space, including an overview of what is happening in different geographies, and what kinds of services enterprises are looking for.
And while the report concludes that the SaaS market is booming and will register global growth of 16.8% between 2012 and the end of 2015, or from US$ 14.3bn in 2012 to US$ 16.7bn in 2013 to US$ 21.3bn in 2015, there are considerable regional differences.
SaaS Regional Growth Variations
Unsurprisingly, North America has the highest growth rate, not just because of its highly developed Internet infrastructure, but also because of the current positive tech growth forecast despite recent poor earnings figures.
Currently, North America accounts for 60.8% of world revenues, with SaaS combined revenues hitting US$ 9.1 billion at the end of last year, up from US$ 7.8 billion in 2011.
In the US, SaaS deployments are commonly used in email, expense management, financial and productivity suites, while web conferencing in North America has broader use than in any other region as a result of widely dispersed enterprise workforces.
The result is that the US will be the principal regional driver for SaaS in North America on the back of strong demand for mobile, cloud and smart technologies, and growth of 6.7% for the entire tech sector in the US in 2014.
There will be little, or no, growth in Europe in the immediate future, but this is because of general economic stagnation rather than a lack of interest in SaaS. In fact in recent weeks some of the major economies have started pointing to a weak, but notable, upturn so predictions here could well change.
Even still, the SaaS market continued to grow and was estimated to have been US$ 3.2 billion in Western Europe in 2012, up from US$ 2.7 billion in 2011. Eastern Europe is also beginning to show signs of growth with revenues of US$ 169.4 million last year, up from US$ 135.5 million
There are signs of high adoption rates in the more developed sub-regions of Europe — Ireland, the Netherlands — as a result of the entry of large US vendors into the region and a culturally open attitude to technology innovation. These countries also have a well-developed Internet infrastructure. In developing areas like the Middle East and Africa, SaaS is still a challenge as a result of poor infrastructure.
SaaS in the Asia/ Pacific region is worth US$ 1.4 billion up from US$ 1.2 billion in 2011, with Japan as the biggest player with an estimated US$ 495.2mm in 2012, up from $427.0mm in 2011. That said, the report notes adoption across the region is fragmented with a notable divide between Japan, Australia, New Zealand, Hong Kong, and Singapore and emerging markets like China and India.
Migrating to Mobile
There are a number of factors that are encouraging growth across the market, not least of which is the fact that currently 83% of companies either have, or expect, to adopt SaaS technologies in the immediate future.
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