- Worldwide retail and hospitality SaaS revenue is projected to grow 389% from $3.5 Billion today to over $16.9B in 2020.
- All clouds are not the same. There are significant differences between single and multi-tenant architecture that should be understood upfront.
- Inability to customize software is often cited as a major concern when considering a SaaS solution, but this is no longer true in many cases. Among the largest cloud solution providers, Demandware (Salesforce), Magento and NetSuite are out in front in offering cloud code customization, each taking a different architectural approach.
- From IHL Group’s research, retailers have expressed they are experiencing total life cycle cost savings by transitioning to SaaS ranging from 25-50%.
- From our Sophia Data Service of installs from 1,500 e-commerce installations in North America and Europe, we currently can see retailers keep SaaS solutions an average of 17% longer because of ongoing enhancements made to the platform compared to traditional client/server models for which they have to patch and update themselves.
- Perhaps the group facing the greatest management challenge with this ongoing shift to SaaS are System Integrators (SIs). We estimate that spending with SIs has a worldwide yearly compounded growth rate of only 2.8% up to 2020. This means that SIs must transition their practice expertise along with considering new revenue streams. We believe this is one of the underlying drivers as to why a few SIs are beginning to develop and sell their own software or acquire software companies. As we believe this trend will continue, the implications will be greater overlap and potential conflict between SIs and their ISV’s partners.