New report predicts $50.8 Billion in SaaS enterprise applications by 2018

Software as a service or "SaaS" enterprise applications are on track to reach $50.8 billion in sales over the next three years, according to a new IDC report. In IDC's Worldwide SaaS Enterprise Applications 2014-2018 Forecast, the research firm provides current size estimates for the SaaS enterprise application market and a 2014-2018 forecast. According to IDC, worldwide revenue for the market was $22.6 billion in 2013 and will experience a compound annual growth rate (CAGR) of 17.6 percent for the 5-year forecast period (2013-2018).

"Demand for SaaS enterprise applications is accelerating and exceeding the demand for on-premise applications by five times," said IDC Research Director Christine Dover in a company statement. But while a good portion of organizations are taking advantage of one or more cloud-based solutions or services, critical business functions like accounting and enterprise resource planning (ERP) often remain on premises.

"Generally, wherever new enterprise application software is required, the expectation is that SaaS applications are preferred, particularly for customer relationship management and enterprise resource management applications," Dover continued, in the statement. "However, most of the enterprise software currently in use today and in the near future remains on-premise, particularly in the areas of supply chain, manufacturing, and engineering."

The SaaS-based CRM

Forbes columnist Louis Columbus pointed out that the SaaS CRM applications market will be worth $19.8 billion by 2018 (representing a 19.6 percent CAGR) and that on-premise CRM enterprise applications are projected to drop from $14.7 billion in 2013 to $12.1 billion in 2018.

Microsoft has been on the inside track in the SaaS CRM market in recent years, having introduced the general availability of Microsoft Dynamics CRM Online in 2008 ...