IDC’s research: Enterprises are gaining more interest in SaaS delivery model

Interest in the SaaS (software as a service) delivery model is growing to such a point that by 2012, nearly eighty five percent of new vendors will focus themselves on SaaS services, according to new research from IDC.
Also by 2012, some two thirds of new offerings from established sellers will be sold as SaaS, IDC expounded. SaaS revenue will jump up accordingly in the following couple of years, rising from $13.1 billion in 2009 to $40.5 billion by 2014, according to the researchers. License earnings for standard on-premises applications will drop approximately $7 bill this year and are likely in permanent decline, since SaaS is in general sold through subscription, the report adds. IDC's guess includes applications, application development, deployment and sub-structure software delivered in SaaS form. Over the subsequent a few years, the later categories will gain more market share, according to IDC.
Enterprises are turning to SaaS for quicker deployments, the absence of a requirement to purchase and maintain hardware, and less complicated upgrades. But there are specific problems to avoid too, researcher firm Altimeter Group warned in its SaaS "bill of rights" released last year.
For one, enterprises should ensure that they own and have access to their information, the firm announced. Unanticipated extra costs about data storage present another danger, the report said. "SaaS clients often find out after the fact that the storage allocations do not meet actual usage requirements. Once hooked into the product, ongoing storage costs could prove to be the largest expense item."
Other Altimeter suggestions, for example client indemnification from intellectual-property suits filed against their vendor, and access to multiple support tiers, are carryovers from the arena of on-premises software.