Gartner predicts that the global software-as-a-service market will grow by 14.1% this year to $8.5 billion, with the delivery model taking a 26% share of total CRM sector revenues.
SaaS accounted for 24% of total CRM sales last year, with penetration levels ranging from between 11% and nearly 40% depending on the sub-segment.
Sharon Mertz, a research director at the firm, said: "The market landscape for on-demand CRM continues to evolve and mature as the availability and use of SaaS solutions becomes more pervasive. Greater market competition and increased focus by the mega-vendors reinforces the legitimacy of on-demand, mitigating initial objections about security and availability for many."
She added that that penetration levels of SaaS across all enterprise application software sectors was also expected to grow from 10% last year to more than 16% in 2014.
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