Economic crisis helps software-as-a-service

The software-as-a-service (Saas) industry will hit a high note during the economic downturn as businesses search for more cost-effective IT solutions, according to a new survey.  The new data, released by research group IDC, shows 76% of US businesses will use at least one SaaS-delivered application this year.

The percentage of US companies planning to spend at least a quarter of IT budgets on SaaS applications will rise from 23% in 2008 to almost 45% in 2010. IDC also expects that by the end of 2009, almost 35% of worldwide SaaS revenue will come from outside the US.

IDC director of SaaS research, Robert Mahowald, says the economic downturn is a God-send for the SaaS industry.

“With a broad slowdown across IT sectors, businesses are increasingly bearish about their short-term ability to invest, whether for stability, growth, or cost savings down the road.”

“But SaaS services have benefited by the perception that they are tactical fixes which allow for relatively easy expansion during hard times, and several key vendors finished the year very strong, reporting stable financials and inroads into new customer-sets.”