Online software sales are set to increase in 2009 according to Gartner. This is in line with the fact that people are thinking in terms of getting more efficient, more mileage out of whatever software they have or in worst cases, looking out for low-cost, affordable, efficient alternatives.

Even as hardware sales decline, Gartner predicts that online software-as-a-service sales will rise by more than 20 percent in 2009.
 
The sales value is billed at around $10bn .The growth areas are those which have common processes and hence in the horizontal applications space - that would mean those who have global, distributed teams will have a big say in the future. They would benefit by moving to an online collaboration envirionment similar to Zoho.

The SAAS space has seen max growth in the last couple of years - ironically, it also has coincided with the worst economic times in living memory!
However, this purge will help move toward more rational software pricing and will benefit the end users by giving them choices at affordable rates - which they did not have in a useful format for quite sometime.

Factors that impede adoption of SAAS include the following -

• Data security concerns
• Competitive differentiation,
• Scalability and
• Vendor longevity

Shankar