Report: SaaS market to exceed $22 billion by 2015

Wednesday, April 04, 2012 by The eFax Team

Cloud computing is being more widely adopted by companies around the world as it promises to improve mobility and increase productivity at lower costs than traditional solutions. According to a new report by research firm , the worldwide market for Software-as-a-Service will generate more than $14 billion in revenue by the end of 2012, representing nearly 18 percent growth from 2011.

SaaS and other cloud computing resources are becoming more common in the enterprise, with small and medium-sized businesses also catching on quickly. The rise in adoption rates is being driven by increased familiarity with the technology, as it has been around for more than a decade. Gartner noted that companies will continue adopting SaaS in the coming years, eventually pushing the market for the technology to more than $22 billion in revenue by 2015.

Many organizations like the applications that can be used in the cloud, which include everything from hosting a service for improving communication to utilizing business analytics as a way of improving customer satisfaction. However, there are still some inhibitors that are slowing down the adoption of the cloud, the news source said.

"The top issues encountered when deploying SaaS vary by region," said Sharon Mertz , a research director at Gartner. "Limited flexibility of customization and limited integration to existing systems are the primary reasons in North America."

The United States, however, still represents the largest opportunity for SaaS and cloud computing compared to anywhere else in the world. According to Gartner, revenue generated from SaaS in the United States will exceed $9 billion in 2012, an increase from $7.8 billion in 2011. One of the drivers behind the high cloud adoption rate across the country is an increasingly dispersed workforce and the need to keep everyone connected to a single network, regardless of location.

A recent report by found that 75 percent of North America's workforce was mobile in 2010. The study also noted that there were more than 182 million employees working remotely throughout the Americas in 2010. This number is expected to increase to more than 212 million by 2015, especially as more organizations use cloud computing and other mobile technologies.

According to a study by , the global mobile cloud application market is going to expand at a compound annual growth rate of 87 percent through 2014. This market is also being driven by the increasing demands for portability and the ability to work outside the office without sacrificing efficiency.

There is a wide diversity of applications offered in the cloud, including online fax tools and other unified communications services. This gives decision-makers many options, making the cloud much more appealing than single software solutions that need to be purchased and maintained on premise.

Still, as the cloud market grows, the adoption rate, while increasing, isn't as high as analysts initially predicted. A recent study by found that roughly 33 percent of businesses will use the cloud in 2012, compared to only 16 percent that did in 2008. Although the deployment rate has doubled in five years, it has been a slow uptick, often with security concerns acting as the main inhibitor.

If cloud vendors distinguished themselves with more realistic metrics, such as showing their exact pricing models, companies may be more inclined to use the services, InformationWeek said. Providers should also create service-level agreements that are targeted more toward individual organizations, rather than generic documents, to suggest specific demands are taken into account.

Cloud computing will inevitably continue growing, especially as more businesses struggle through the unstable economy and the workforce continues to go mobile and expand geographically.

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