Countering the growth projections is the economic recession which positions the market for -1% revenue growth in 2010 rebounding in 2001.
Figure 1: Software-as-a-Service Revenue Growth & Forecast (2009 -- 2014)
Revenue $ Million
Growth %
2010
145,723.6
-1.0
2011
151,552.5
4.0
2012
157,766.1
4.1
2013
164,234.6
4.1
2014
170,968.2
4.1
Implications of SaaS Adoption & Growth for Business & Organizational Models
As the economics of information technologies is being reordered due to the exceptionally fast growth of SaaS-based development platforms and applications the implications for businesses and organizations is strategic. Most fundamentally is the availability of enterprise-level applications which can be paid for using Operating Expense (OPEX) accounting principles, no longer requiring Capital Equipment expenditures, sometimes called CAPEX. This has taken the power of information technologies and applications out of the hands of the CIO and given it to the line-of-business managers and leaders. The dynamics of how CRM has shifted from the CIO to the Sales Vice Presidents and Chief Marketing Officers (Tehrani, 2006) is a case in point. Secondarily the multi-tenancy of the platform (Tehrani, 2006) and the scalability of the Ajax application language is also fundamentally reordering application development as well (Serrano, Aroztegi, 2007). As a result of the combining of all these factors, businesses and organizations are capable of creating knowledge networks. This has served to significantly reduce the lag time for knowledge transfers globally and also created entirely new Ajax-based applications that can manage and analyze exceptionally large and complex data sets (Serrano, Aroztegi, 2007). The net effect of all...
For businesses and organizations this is a highly significant shift and one that needs their attention over time.
All of these factors of growth however need to be tempered with the fact that there is significant aversion to risk on the part of CIOs as they see SaaS as too risky to put their enterprise-wide, often customer-centric data on. What makes security such a concern for CIOs is that SaaS is a very powerful political undercurrent that in many cases is making their roles all the more challenging. SaaS has had widespread reliability problems, some of them so great that salesforce.com took the exceptionally open step of creating a website called trust.salesforce.com as CEO Marc Benioff believes that trust is so important for his frims' platform that reliability must be regularly communicated. Yet the factors that led to the lack of reliability is what has CIOs and even some CEOs nervous about SaaS. What Salesforce.com was facing was a lack of scalability in their servers and also a lack of scalability for the multi-tenant SaaS architecture they had installed in 2003. Their reliability issues began in 2005 and eventually were minimized through the use of server virtualization and optimization of the core applications. Twitter, a social networking application, is single-tenant today and crashes periodically. Clearly as a SaaS platform Twitter must go multi-tenant by design to alleviate this reliability issue.
All of these issues of scalability, repeatability of processes and stability of the SaaS platform have critics of the platform commenting that it is only a matter of time until there is a widespread data breach. In fact SaaS-based applications at Salesforce.com have never been breached.
The U.S. And global governments continue to evaluate
