Do You Know What’s in Store for the SaaS Space? 8 SaaS Trends to Watch in 2013

Sudip Verma

January 15, 2013

SaaS Trends to Keep an Eye on in 2013 from Forrester and IDC

With 2013 comes new challenges for the Technology sector. What are industry experts predicting for 2013?
TechCrunch recently profiled a Forrester article that covered some predictions for 2013 in the SaaS space, in particular:

1) Significant Growth

This year experts believe the SaaS software market will grow by 25% to $59 billion. By 2014 they expect it to grow further to $75 billion.

2) Smart Computing

Forrester profiles a segment called “Smart Computing.” These are apps that provide direct access to to data that is used for decision making purposes. They estimate this market to be $41 Billion. By 2014, it is projected to increase to $48 Billion.
Forrester feels these “smart computing” apps overlap with SaaS products “because the browser-based access model for SaaS products works better for collaboration among internal and external participants than behind-the-firewall deployments.”

3) The US Tech Market is Expected to be the Growth Market

European growth is expected to be sluggish, given the economic troubles in the region. The Asia Pacific tech market, meanwhile, is a mixed bag as Japan will continue to slump after its post-Fukushima disaster pickup in 2012. China, however, is in better shape and will continue to rise in 2013 and 2014 after a 2012 slowdown.

4) Increased Tech Spending from US buyers

It will be US tech buyers who will make the biggest adjustment, stepping up their tech spending as an improving US economy combines with strong demand for new mobile, cloud, and smart technologies to accelerate growth in the US tech market. 5.4% growth anticipated in 2013, and 6.7% growth in 2014.

A separate IDC report also had some compelling predictions for SaaS space in 2013.

1) Eyes on Emerging Markets

Emerging markets IT spending will grow by nearly 9% to over $730 billion. This is nearly twice the developed markets growth, and accounts for 34% of all IT spending and 51% and all IT growth. Given the predicted slack growth in Europe, this might provide a set of alternative markets to explore.

2) Big Year for Mobile

Mobile devices, especially smartphones will grow by 20% and will drive 57% of all IT market growth.
This carries implications for marketers as smartphones start to supplant PCs as the method of choice for surfing the web and reading email. It also presents a challenge for SaaS providers — given the growing use of tablets in the marketplace, users will want to ensure a SaaS solution can work on their Tablet platform.
With tablets like Microsoft’s Surface Pro coming to market, there will be greater emphasis on how well traditional applications work on a smaller touch enabled screen.

3) M&A will Pick Up in the SaaS Space

IDC predicts there will be $25+ Billion in SaaS acquisitions over the next 20 months. That’s an increase from $17 Billion in the prior 20 month period.

4) Platform as a Service (PaaS) will Continue to Grow in Popularity

The number of “industry focused” Public Cloud platforms is predicted to increase by ten times by 2016.
It will be interesting to see how accurate these predictions given the instability facing the world economies. For my next blog, I will focus on the growing importance of mobile tablets in the workplace, specifically the Microsoft Surface Pro. I’ve commented on the past about the original Surface, but will see if the x86 version brings anything new to the table.