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SaaS to exceed $14 billion revenue in 2012, report says

The ongoing global economic crisis is impacting companies in a lot of ways, forcing decision-makers to implement technologies that can reduce IT expenses without jeopardizing efficiency. This is leading businesses to look to the clouds for answers, as hosted services can enhance productivity at a lower cost than traditional offerings.

Cloud computing is becoming more important today because the double-dip recession is taking place and forcing business executives to find alternative solutions. According to a report by KPMG, Software as a Service is the dominant cloud model in the private sector, as organizations can have access to on-demand software and eliminate the need to maintain and install software on each platform. The study noted that SaaS generated roughly $12.3 billion in revenue in 2011 and is forecast to generate approximately $14.5 billion in 2012.

"As the current tight economic conditions are felt across the globe, tight IT budgets are pushing demand for cloud computing services," Steve Watmouth, a partner in KPMG's CIO advisory team, said. "The attraction, especially for the smaller business, lies in organizations no longer needing to find funds for infrastructure, deployment or training."

The cloud is growing more important today because of the expanding mobile workforce and the need to access mission-critical solutions from anywhere at anytime, regardless of device. By leveraging the cloud, companies can give employees the ability to do so, enhancing satisfaction and productivity in the workplace, KPMG noted.

Despite the growing market for the cloud, there are still some concerns associated with the technology. These issues are primarily related to security, stability and reliability, but are often outweighed by the cost-saving advantages. Instead, organizations are making stronger arguments when establishing the service-level agreement with the cloud vendor, KPMG said.

"The need for security means businesses are pushing for stricter governance controls around cloud computing and SaaS," Watmough said.

A separate report by Network World noted that decision-makers need to determine where sensitive information is stored within cloud servers, how accessible it is and what levels of security the service provider has in place. In doing so, companies can ensure mission-critical assets are not jeopardized and individuals can continue to work efficiently without inadvertently exposing confidential information.

As the cloud continues to grow in importance, executives need to take the proper precautions to ensure the virtual environments remain efficient.

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