Value Lies at the Intersection of Disparate Disciplines

James Colgan

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How Quickly Will Software Vendors Move to the Cloud?

According to PwC, in 2009, the top 100 software vendors generated 3.7% of their revenues from SaaS in the US

There’s an excellent discussion going on over on the Cloud Computing Google Group about the pace of migration of traditional software to a SaaS model.

Here I recently went into some of the very real reasons why the migration is slower than some would like, but didn’t really talk about the pace of adoption.  There are some numbers that make for some interesting analysis.

According to PwC, in 2009, the top 100 software vendors (traditional non-SaaS) generated 3.7% of their revenues from SaaS in the US; and 1.1% of their revenues from SaaS in Europe.  In the same report, the US has a 44% market share and Europe has 36% market share by revenue (License, Maintenance and Support).

According to Gartner, in 2010, the WW installed enterprise software market grossed about $104 Billion.  So, roughly, we could say that installed software vendors (US & EU only) brought in nearly $5 Billion in revenues in 2010.  So nearly 5% of revenues since the inception of SaaS (not including ASP)?

While some ISV CEOs may position the cloud as a fad/irrelevant/non-strategic/etc. the smart companies are out there experimenting with technologies, use-models, and business models…..but most importantly, they’re talking to their customers (who will buy) and vendors (who are looking round corners for their customers).  The benefits of the cloud are undeniable, but there are impacts on both customers and vendors that need to be carefully navigated.

Even after a dozen or so years since the launch of Salesforce.com, we’re still in the early adoption phase of this new phase of computing delivery and application consumption.

Will installed software ever go away?  Have you installed an iPhone/iPad/Android app recently?

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More Stories By James Colgan

James Colgan is the Founder and CEO of Xuropa, a unique cloud-based Sales & Marketing Platform for packaged software vendors for the demo and retail of their products via the cloud. Built upon a unique lead nurturing and analytics engine, Xuropa enables software vendors to conveniently deliver their products on the cloud and drive the resultant sales pipeline to increase revenues and profits.
Built upon nearly 20 years of high-tech experience, James has been pushing the envelope of cloud computing, focused on the intersection between the cloud, Customer Relationship Management (CRM), and Social Media Marketing, particularly as it relates to traditional installed software.