What do you think is the reason why big companies nowadays such as Microsoft, Oracle, SAP, IBM and even Symantec have all considered developing and releasing Software as a Service (SaaS) applications, not only intended for small businesses but for huge corporations as well? Some companies may say that they are just developing SaaS software solutions to render services to more people or simply to tighten the competition and give more people options to choose from. This is actually a win-win situation for consumers but certainly becomes a threat to SaaS vendors such as Salesforce.com, which has dominated the SaaS market for a lot of years now.
But then again, it is obviously the increase in revenue of SaaS vendors that has paved the way for this sudden switch. Gartner Inc., a Stamford Connecticut based research firm has reported on the 10th of August, 2007 that the worldwide SaaS revenue within enterprise software markets is projected to surpass the US$ 5.1 billion mark in 2007. This is a huge 21% increase to the revenue earned in 2006. Gartner Inc. further indicated that SaaS worldwide revenue will even reach as high as US$ 11.5 billion by the year 2011 due to the large number of companies switching to SaaS software applications.
Limited upfront investment in staffing and capital, rapid deployment and ease of use coupled with the reduction in maintenance and support for software management are indeed more than enough to make SaaS as the most desirable alternative to many on-premise software solution. These reasons keep the wheel running for SaaS vendors despite of the competition imposed by huge software companies. The challenge to develop more reliable and consistent SaaS software applications will be the driving force of these vendors in obtaining worldwide success and recognition.