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The rise and rise of SaaS and the impact on enterprises

2014-08-10 13:59

The rise and rise of SaaS and the impact on enterprises

The popularity of software-as-a-service (SaaS) is set to soar, if the results of a new survey by Forrester Research are anything to go by.

According to its report, SaaS solutions and products accounted for the majority of enterprise spending on cloud in 2013 with $36bn (£21bn) out of the $58bn in revenues that were generated.

Growth in the public cloud market is set to rise to $72bn this year, while in 2020 this figure is set to reach some $191bn, estimates suggested.

The report found similar trends in other related application categories, including accounting, enterprise asset management, supply chain management, vertical industry-specific applications and business intelligence.  

SaaS companies supplying to the enterprise market are often larger companies, but size is not necessarily an indicator of stability. In a fast growing market there is inevitable change as the market develops and consolidates. 

Anecdotal evidence suggests that publicly traded SaaS companies saw increased IPO and acquisition activity at a time when SaaS business growth is accelerating. Additionally, many analysts are also commenting on potential reductions in SaaS company valuations of up to 50 per cent.

However, with growth comes change. Software developers are suffering as information and communication companies continue to endure rising levels of insolvencies.[1] The Exaro Insolvency Index, which tracks company failures across the UK, shows that winding up petitions almost doubled from 16 to 29 in the quarter to January year-on-year, while appointments of liquidators reached 175 up from 132.

In addition, orders or resolutions to wind up increased by 41 per cent from 140 to 197.

The benefits of SaaS are significant and although there are risks, these can be managed and mitigated. The off-site storage of applications and data raises different questions about continuity of access and loss of data by comparison to systems which run in-house. 

Effective preparation by both SaaS Providers and SaaS customers is the most effective means to ensuring productive benefits in using SaaS, irrespective of any potential failures. 

Source: /sesirpretne-no-tcapmi-eht-dna-saas-fo-esir-dna-esir-eht/50/4102/golb/ne/moc.puorgccn.www

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