Cloud computing is set to change the rules in the software industry challenging existing suppliers and threatening the income of those resellers that are not offering users greater flexibility.
The signs that things are already changing can be seen in the growth figures of cloud-based application sales and the shift in the hosted portion of the overall market share.
According to the report, The UK Software Market: Trends and Forecasts, by TechMarketView the cloud is a threat to the existing status quo.
Report author Philip Carnelley, research director at TechMarketView, (pictured) told MicroScope that those resellers that continued to ignore the cloud ran the risk of losing business.
"If you are not doing cloud then you are looking at a slowly declining market," he said.
His report predicts that by the next decade SaaS will be the dominant route of delivering software and the hype around the hosted delivery model is totally justified.
"It is going to be over the next few years and not the next few months," he added "For resellers it has been very straightforward but now that is breaking down and people want different applications."
TechMarketView predicts that by 2012, just a couple of years time, 15% of the UK's entire software market will be delivered via the cloud.
But Carnelley warned that this growth will be at the expense of some traditional application sales.
"We are forecasting that it will be flat this year and then grow between 3% and 5% over the next three to four years," he said.