Australian software-as-as-service (SaaS) providers reaped $2.6 billion in public cloud revenue during 2018, new figures from IDC revealed.
According to the analyst firm, the local public cloud services market hit a total value of $4 billion after experiencing 30 per cent year-on-year growth.
SaaS now accounts for 65.8 per cent of this, followed by infrastructure-as-a-service (IaaS), which made up for roughly $1 billion of the market. Meanwhile, platform-as-a service (Paas) generated just over $500 million.
IDC estimated that around 58 per cent of Australian organisations have implemented a SaaS solution, claiming it provides them with "the latest technologies", while reducing internal resources as applications and infrastructure are left to solution providers to manage.
"Australian organisations are seeking solutions to remain competitive in today's digital economy,” said A/NZ IT services analyst Chayse Gorton. “The high percentage of SaaS revenue reflects that SaaS solutions fit the bill."
However, approximately 13 per cent of Australian organisations are not currently interested in deploying a SaaS solution, IDC claimed.
This relates to the investment that Australian organisations have poured into legacy applications. Gorton said. “Rather than making a jump to SaaS, Australian organisations often wait until existing applications come to the end of their life,” he said.
Organisations are also aware that deployed SaaS solutions can become sticky,” IDC stated, as SaaS applications often require complex integrations with on-premise software to avoid information silos across the cloud and on-premise.
This means the organisation cannot quickly or cheaply switch even if a more innovative SaaS application appears, the analyst firm added.