SaaS to dominate business analytics market

By Deb Gutierrez | Jan 20, 2010

Over the next five years, the business analytics software-as-a service (SaaS) market will grow more than three times as fast as the total business analytics software market with a compound annual growth rate (CAGR) of 22.4% through 2013. A new study from IDC finds that the number of business analytics SaaS users will grow rapidly from a small base. However, market revenue will remain low relative to on-premise software throughout the forecast period.
 
"The business analytics SaaS market is poised for rapid growth as more organizations turn to cloud-based computing and alternative deployment options," said Brian McDonough, research manager for IDC's Business Analytics Solutions research service. "Growth expectations must be tempered as revenue generation gains traction behind user adoption."
 
As more and more business analytics software providers move to address increasing market demand for software that is updated frequently, hosted offsite, and can be purchased on a subscription basis, several factors will help aid in driving this growth.

Capital expenditure policies and budget constraints make SaaS offerings more attractive as they enable departments to subscribe to software services using operational budgets.