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SaaS predicted to Overtake Traditional Software Delivery

By Steve Simmerman | 07/26/2010 | 5:44 PM

"As a result, a permanent change in software licensing regime will occur" according to an IDC source.

Pretty interesting findings and some compelling numbers behind this story based on research by IDC.  Further, IDC expects a number of industry changing shifts as a result of the emergence of the SaaS (software-as-a-service) model including:

  • SaaS market for enterprise applications and other software will reach $40.5B in 2014 up from $13.1B in 2009
  • By 2012, nearly 85% of new software firms will offer their products based on the SaaS model
  • Manufacturing software including logistics management, transportation and warehousing is expected to be among the leading application areas fueling the growth of the SaaS market

Think about the implications across the market, for vendors and customers alike. No doubt this shift will have a dramatic impact on software sales processes and certainly will have an impact on software sales commission plans.  IDC states that this shift toward SaaS software purchases will result in "a nearly $7 billion decline in worldwide software license revenue in 2010". 

How this will impact support contracts, service level agreements (SLA) and buying behavior will be hard to predict but it seems pretty clear that we will all be facing a paradigm shift in terms of software licensing and purchases.

What is your experience with SaaS purchases?  What new obstacles did you have to overcome vs. traditional software licensing purchases?

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The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Steve Simmerman

Steve Simmerman

Steve Simmerman is a Senior Director with JDA. Simmerman has more than 25 years of experience in the supply chain industry including software, consulting and material handling. He has focused his efforts on working with clients to achieve high performance supply chain results through partnerships and creative solutions. He is a member of CSCMP, WERC, and MHIA and is a regular contributor to several industry publications and events. Simmerman holds his undergraduate and MBA degrees from The University of Notre Dame.


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