Global revenue in the Software as a Service (SaaS) industry topped $43 billion in the first half of 2017 — up 23 percent from a year ago, making up nearly 70 percent of the overall cloud market, according to new data from the IDC market research firm.
The numbers illustrate the massive, ongoing shift from traditional software to cloud-based apps and subscription services inside many companies.
The other two primary cloud segments are also expanding rapidly, grabbing a larger share of the market even as the SaaS sector continues to grow.
Infrastructure as a Service (IaaS), the base layer of cloud computing and storage, grew 38 percent to $11.2 billion in revenue in the first half of 2017, according to IDC’s Worldwide Semiannual Public Cloud Services Tracker.
Platform as a Service (PaaS), higher-level services for developing, running and managing applications, grew 50 percent to $8.5 billion in revenue.
“Businesses now think ‘cloud first’ when it comes to their IT strategy and software footprint, since the benefits of cloud are clear and have been broadly demonstrated in most industries,” said Eric Newmark, an IDC program vice president for SaaS and enterprise applications, in a summary of the findings.
Now, he explained, the SaaS market is entering a new phase.
“Many companies have picked the low-hanging fruit, in terms of apps that could be easily moved to the cloud, and are now evaluating the migration of their next set of larger strategic systems (i.e. ERP, supply chain applications, etc.) to a SaaS model,” Newmark said. “These projects, coupled with companies’ efforts to embrace digital transformation, will continue to fuel strong SaaS growth.”
About 73 percent of organizations expect to shift nearly all of their apps to Software as a Service by 2020, according to a report this year by BetterCloud, a SaaS operations and management company.
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