North America Accounts for Two-Thirds of World SaaS Sales: Gartner

By Chris Preimesberger  |  Posted 2011-09-16 Print this article Print

Worldwide software as a service revenue is on track to surpass the $12 billion level in 2011, which computes to a 20.7 percent increase over 2010's record of $10 billion, researchers said.

Cloud service and infrastructure-related sales have been documented as zooming up the marketing charts at a dizzying clip-up 21 percent in total revenue year over year-according to IT market researcher Gartner.

Worldwide software as a service (SaaS) revenue is on track to surpass the $12 billion level in 2011, which computes to a 20.7 percent increase over 2010's record of $10 billion, researchers said in a report released earlier this week.

Breaking down worldwide SaaS revenue into regions, Gartner reported that North America leads by a large margin and is forecasting nearly two-thirds (63.6 percent) of all SaaS revenue by the end of the calendar year to be sold in that section of the world.

Gartner predicts that by the end of 2015, North America's share will level off at about 61 percent of worldwide SaaS revenue.

Naturally, the United States represents the largest opportunity for SaaS, Gartner said, because it is the most mature of the national markets. SaaS revenue in North America is projected to total $7.7 billion in 2011, a 19 percent increase from $6.5 billion in 2010. North American SaaS revenue is forecast to reach $13 billion in 2015, Gartner said.

The top issues encountered when deploying SaaS vary by region, the researcher indicated. Limited flexibility of customization is a top issue in the EMEA region (Europe, the Middle East and Africa); limited integration to existing systems is the primary reason in North America and the Asia-Pacific region.

"Increasing familiarity with the model, continued oversight on IT budgets and the growth of platform as a service [PaaS] developer communities and interest in cloud computing are now driving adoption forward," said Gartner Research Director Sharon Mertz.

"Usage varies within markets, regions and countries, and the reasons for adopting SaaS vary by region. Total cost of ownership (TCO) is a primary driver in the [EMEA region], while ease and speed of deployment is the key reason for choosing SaaS in Asia-Pacific and North America."

As for other regions, Gartner projects that Western Europe's SaaS revenue is on pace to reach $2.7 billion in 2011, up 23.3 percent from $2.2 billion in 2010. SaaS revenue is projected to reach $4.8 billion in 2015. In Eastern Europe, SaaS revenue is expected to reach $131.4 million in 2011, up 29.8 percent from 2010 revenue of $101.2 million. Eastern European SaaS revenue is forecast to total $270.1 million in 2015. 


Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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