SaaS revenues continue to climb

The pace of cloud adoption is showing no sign of slowing up, with companies turning to the cloud for delivery of software.

New figures from Gartner reveal that software-as-a-service (SaaS) revenue is set to rise 21 percent this year, with global revenue expected to reach $12 billion by the end of the year.

The research company estimated that cloud-based software delivery is expected to continue on this healthy trajectory up to 2015 when global revenue is set to hit $21 billion.

A lot of that growth is down to the Salesforce effect. The lion's share of SaaS is in the customer relationship management (CRM) market this is expected to reach $3.8 billion by the end of 2011, about 32 percent of the CRM market's total revenue and a 19 percent growth.

But not all software is being delivered by cloud. The ERP market is lagging behind and is expected to be worth $1.7 billion by the end of the year a growth rate of just 13 percent

The rising figures show that SaaS is now a significant method of delivery within thenteprise. "After more than a decade of use, adoption of SaaS continues to grow and evolve within the enterprise application markets," said Tom Eid, research vice president at Gartner. "This is occurring as tighter capital budgets demand leaner alternatives, popularity and familiarity with the model increases, and interest in platform as a service (PaaS) and cloud computing grows."

"Initial concerns about security, response time and service availability have diminished. "Usage and vendors' on-demand ecosystems continue to evolve to provide additional business and technology services, more vertical-specific functionality, and stronger communities of partners and buyers," Eid added.