Software-as- a-service (SaaS) is anticipated to become the fastest growing segment of the overall cloud computing market on a worldwide scale. The benefits of SaaS model have been ubiquitous across several verticals and horizontals. Among the different verticals, financial institutions (BFSI) and IT based industry (ITES), are the biggest users of SaaS-based offerings; similarly, in terms of horizontal, Small and Medium business (SMBs) are reaping the benefits of SaaS model more than the larger firms. This is mainly because of the inherent features in the SaaS-based offerings, such as multi-tenant architecture; and greater room for a high level of innovation and customization, which are possible mainly from the SaaS vendors’ end-points. Additionally, the development and implementation time for bringing in newer application tools or even modifying the existing ones, also get reduced significantly. The current trend in SaaS-based offerings exhibits a newer formation of software implementation process (also considered to be the third-wave) by shifting from a single software usage based platform towards a platform on which multiple and mission-critical applications can be offered to users. Among the different SaaS offerings, Customer Relationship Management (CRM) is the largest contributing segment and Collaboration software is becoming the fastest growing segment. Together, they are contributing more than 60 percent of the total SaaS market. Annual revenue from the SaaS market is roughly to be $ 38 billion USD and is projected to grow at a CAGR of 40% from 2016 to 2020. Although, the market growth for SaaS has been seemingly favorable over the traditional on-premise software market, still it does raise some potential questions, primarily on how much of IT security issue has been mitigated for larger companies and also on how much cost effective benefit can be achieved through the usage of subscription-based offerings over traditional on-premise software for a period of five years. Techonomics Research deep-dives into the SaaS space in a holistic manner for helping the companies to assess the actual market potentiality of SaaS-based offerings in the next 4-5 years.
Research done by Asif Gani.