Global Software as
Service market is expected US$53 billion by 2018, or 59 per cent of the
enterprise public cloud computing market from the current 2013 revenues of US$23.2
billion, according to Juniper Research and also expects the overall enterprise
cloud computing market to reach US$90.7 billion by 2018. According to Forrester
Research, the total public cloud
services market revenues were US$58 billion in 2013, is expected to grow to $72
billion in 2014 and expected to reach US$191 billion by 2020. Software as a
Service (SaaS) solutions accounted for $36 billion in revenue in 2013. SaaS market
has reached significant maturity levels and well established in several application
categories like sales force automation, customer relationship management, human
resource management, eProcurement and ePurchasing, replacement of existing
licensed software. Cloud platforms, led by Amazon Web Services LLC, with
revenues of $4.7 billion in 2013 but traditional IT partners IBM, HP and
Microsoft are fast catching up with their own set of offerings and market is
becoming highly competitive. The other two segments of cloud computing Platform
as a Service (PaaS) and Infrastructure as a Service (IaaS) are also expected to
continue growth. But these two segments face certain critical issues in terms
of data
security, compliance and portability. “Both PaaS and IaaS will experience
significant growth over the forecast period as new applications, developed
specifically for the cloud to harness workloads such as big data analysis,
benefit from the PaaS ‘fast-track’ model,” Juniper says.
According to San Diego-based investment firm Software Equity Group, SaaS software revenues will contribute around 25% of the overall software market in the next five years. Research firm Gartner estimated that global spending on SaaS will reach $22.1 billion by 2015. Some software vendors are converting their software delivery and revenue models to SaaS, while others acquire SaaS companies to gain access to this market. SaaS offerings are predominantly based on subscription models where enterprise customers access the software in the cloud by paying monthly subscriptions which is totally different from the traditional software license and maintenance models where customers have to pay large upfront perpetual license fee. With the emergence and development of networking equipment, platforms and access devices like smartphones and handheld devices, SaaS based on subscription model is picking up and customers can easily access data and applications form anywhere, at any time, on any device. Despite this there are certain concerns for CIOs who are not totally adopting the SaaS model as there are security concerns, switching costs, regulatory concerns and also cloud outages and failures too. Adoption of cloud based models is further expected to grow in the next five years as the technologies mature and more applications and services are offered on the cloud. Companies too need to rethink their IT investment strategy as Cloud Computing offers a significant level of cost savings in terms of IT infrastructure investments.
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