Gartner bullish on SaaS

It’s time for market players, followers and fans to listen up, as advisory firm Gartner, Inc. has released more numbers and info all SaaSers will want to hear: Gartner analysts calculated the worldwide SaaS market to have reached $6.3 billion in 2006 and forecasted that figure to hit $19.3 billion by year-end 2011.

In an interesting explanation for this continued burgeoning growth, Gartner research vice president Ben Pring said that “The dysfunction of the client/server era is driving alternative approaches to IT development, delivery and management, which SaaS is the most apparent version of … There is now a widespread consensus among the movers and shakers of the IT industry that SaaS is an important and meaningful issue which can no longer be regarded as the ‘lunatic fringe.’”

Gartner went on to report that Saas adoption is broadening from areas such as customer relationship management and human resources into new areas such as procurement and compliance management. The scale of change involved in moving to a SaaS approach, however, remains a difficulty for many vendors to manage.

The advisors also (gasp!) advised a bit on would-be SaaS implementers, stating that the scale of change SaaS produces requires providers to adapt to keep ahead of the SaaS wave. The Gartners advise that those ready to move on should:

· use solutions built on next-generation web services, SOAs and highly automated server farms to produce multi-tenant, mass-customizable solutions that facilitate agility while sustaining distinctiveness at a reduced cost;

· make strategic decisions as to offering SaaS as one element of a broader portfolio or to take on a complete SaaS-based delivery model;

· act immediately; and

· conduct thorough due diligence to be well-placed to take advantage of opportunities and manage risk.

Gartner further reminded SaaS enthusiasts of the Gartner Outsourcing Summit to be held March 19-21 in exciting Dallas, Texas.