Economics of IT

Sizing SaaS market

By Brij ⋅ September 26, 2006 ⋅  Email This Post ⋅  Print This Post ⋅ Post a comment

Phil Wainewright guesstimates SaaS market to be around $7 billion. Though the definition of SaaS is still all over the place but his explanation comes out strongly:

Web conferencing/collaboration (WebEx, Citrix Online, Microsoft Live Meeting, Raindance, Convoq, Projectplace, LivePerson etc): close to billion dollar
Human resources/payroll (Employease, Taleo, Workstream, Successfactors ) : ~$250 million?
CRM (Salesforce, Oracle, SAP, RightNow, SugarCRM, Sage, entellium ) : close to billion dollar
Supply chain and spend management ( Concur, Ketera, Rearden Commerce, Frictionless commerce, Emptoris, Mitrix, GXS) : ~$500 million
Web content management/Ecommerce/Email and email marketing : ~$3 billion (very rough est.)
Financials and business admin (NetSuite, WinWeb, Twinfield, Quickbooks) $500million

Even after discounting for my usual Google obsession I can’t help thinking why software as a service trend will stop at that. Eventually this has to become an underlying layer to be known as “software behind the search”. As a bad joke it can be termed as Softbets. This market definition will get more fuzzy once Microsoft Live and Google Domain service start getting adoption.