SaaS Gaining Traction Among SMBs: Report

The SMB market for mobile SaaS is already expected to reach $3 billion in 2011 and increase to $16.6 billion in 2016.

As more workers become mobile-enabled, the mobile software-as-a-service (SaaS) market is evolving, with more small to medium-size business employees using smartphones with data plans-and other wireless devices-to further improve productivity and worker mobility, according to Strategy Analytics Wireless Enterprise Strategies' latest report, "Why Mobile SMBs Are Opening Doors to Software-as-a-Service to Increase Productivity and Efficiency."

According to Gina Luk, a senior analyst of wireless enterprise strategies and author of the report, the SMB market for mobile SaaS is already expected to reach $3 billion in 2011 and increase to $16.6 billion in 2016, sustaining a 29.5 percent compound annual growth (CAGR) over five years. On a regional basis, North America and Western Europe represent the greatest near-term SMB spending opportunities for mobile SaaS, Luk said.

In addition, the report noted SMBs in North America spend twice as much on mobile SaaS as those in Western Europe. Strategy Analytics researchers said smartphones and wireless devices form the basis of mobility and pave the way for mobile applications such as access to company email, calendars, CRM systems and databases, and smartphones are becoming an increasingly vital part of the SMB communications infrastructure. As more applications are developed that were traditionally accessible only via laptop computer (such as access to customer resource management systems) and as SMBs continue to form mobility strategies, they will look for ways to leverage the SaaS gains that mobility provides, Luk said.

"Mobility services continue to be a viable segment for mobile operators to grow their subscriber base and revenue. Growth derives from the proliferation of personal-liable devices in business," said Andrew Brown, director of wireless enterprise strategies at Strategy Analytics. "Operators are trying to capture subscribers through corporate/employee discount programs as employers continue to support and adopt mobility, both as a means to improve employee work-life balance and a way to drive company revenues and profitability."

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 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.