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Forrester: SaaS Leading IT Market Growth in 2014

By - Source: Toms IT Pro

Forrester predicts a 6.2% growth in business and government purchases of information technologies in 2014. Forrester, a global research firm specializing in business technology, marketing and strategy, and the technology industry, is predicting even further growth in 2015, up to 8.1%.

The positive outlook for the new year is coming off of a stale 1.6% growth rate for 2013 in the tech industry. While the next two years look promising, the double-digit growth rates of the 90's and 00's may not repeat themselves for some time.

The United States currently constitutes 40% of the global tech market. In addition, the US economy has maintained steady growth and Forrester believes that trend will continue. "While the US economic expansion has not been robust, it has been and will continue to be more solid than growth elsewhere, and that has sustained tech market growth of over 6% in 2013 and 2014," says Andrew Bartels, Vice President, Principal Analyst serving CIOs at Forrester.

Forrester predicts that software will see the strongest growth rate of any IT category in 2014 at 7.8%. The big contributors to software growth will be software as a service (SaaS), mobile app development, business intelligence, analytics and human-based collaboration software.

Licensed on-premises software will also pick up in 2014. "The revival of on-premises software will also be good news for IT consulting and systems integration services in 2014 -- because SaaS leads to much less systems integration services spending than on-premises software, a revival of the latter will slow the erosion of services vendor revenues from on-premises software implementation in 2014, though continued expansion of SaaS will hamper IT services revenue growth in 2015 and beyond," according to Bartels.

However, the Forrester report did not touch on the "Snowden Effect." The NSA-related Edward Snowden leaks may lead some to curtail their use of US-based cloud services, further contributing to sales of licensed on-premises software.

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James Sullivan is a freelance technology writer whose concentrations include cloud computing and video game development. He is based in Portland, Oregon.

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