Global Saas Revenue to Reach $12 Billion in 2011: Gartner

Global SaaS revenue is expected to reach $12.1 billion in 2011, according to a recent report by research company Gartner, Inc. The number represents 20.7 percent increase compared to the previous year when worldwide software as a service revenue was $10 billion. Gartner’s findings show that SaaS market is on a steady growth path.

The researcher highlighted several main drivers behind the adoption of the on-demand software, including interest in cloud computing, growing familiarity with the model, and growth in platform as a service (PaaS) developer communities.

According to the report, North American market represents the biggest opportunity for SaaS. Gartner forecasts that SaaS revenue in North America will reach $7.7 billion by the end of the year accounting for over 63 percent of worldwide SaaS revenue. This represents 18.7 percent rise form 2010 revenue of $6.5 billion. Gartner expects that by 2015, North American SaaS revenue will climb to $13 billion.

The main reasons behind the SaaS adoption in North America are ease and speed of deployment, followed by lower total cost of ownership, Gartner says. CRM is the most frequently used SaaS among enterprise apps throughout all regions, while the use of SaaS Web conferencing, e-learning and travel booking is more widespread in North America compared with other regions, the research company found.

The top issues found in SaaS deployment vary by region, Gartner indicated. Limited flexibility of customization is a top issue in the EMEA region, while limited integration to existing systems is the primary reason in North America and the Asia-Pacific region.

For Western Europe, Gartner predicts the SaaS revenue to reach $2.7 billion in 2011, 23.3 percent increase from $2.2 billion in 2010. SaaS revenue is projected to reach $4.8 billion in 2015. In Eastern Europe, SaaS revenue is expected to reach $131.4 million in 2011, up 29.8 percent from 2010 revenue of $101.2 million. Gartner predicts that number will grow to $270.1 million in 2015.

For Asia-Pacific, Gartner projects SaaS revenue of $768.3 million in 2011, up 27.7 percent from 2010 revenue of $601.8 million. The number is expected to rise to $1.7 billion in 2015. Australia, New Zealand, Hong Kong, Singapore and South Korea are Asia-Pacific markets with the highest SaaS adoption.

In Latin America, which Gartner sees as an “embryonic” market, SaaS revenue is on track to reach $328.4 million in 2011, a 23.5 percent increase from 2010 revenue of $266 million. The research company expects overall revenue for SaaS in Latin America to rise to $694.2 million in 2015.