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SaaS revenues to pass $8.5bn

Cost saving exercises at enterprises drive 14% increase in expenditure on managed software

SaaS revenues to pass $8.5bn
Enterprises are looking at ways of saving money, which has driven an increase in SaaS revenues

Software-as-a-service revenues will surpass $8.5bn this year - up 14% from $7.5bn - as enterprises continue to look at ways to drive down capital expenditure and reduce assets.

The technology has seen a gradual shift in the way companies are spending on SaaS, from a standalone service, to part of their wider cloud infrastructure. Currently, around 75% of SaaS revenues currently come under cloud computing, though Gartner estimates that will rise to 90% by 2014.

"After a decade of use, adoption of SaaS continues to grow and evolve within the enterprise application markets," said Sharon Metz, research director at Gartner. "As tighter capital budgets demand leaner alternatives, familiarity with the model increases, and interest in platform as a service and cloud computing grows.

"Adoption varies between and within markets, and although use is expanding to a wider range of applications and solutions, the most widespread use is still characterised by horizontal applications with common processes, among distributed virtual workforce teams and within Web 2.0 initiatives," she added.

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