The market for software as a service (SaaS) will grow fairly strongly this year as concerns around security and performance are overcome.
According to Gartner the worldwide SaaS Market will hit $9.2bn this year; an increase of 15.7% on 2009 numbers.
The analyst house expects that growth to continue with a 16.2% increase in 2011 to $10.7bn.
SaaS, which involves the delivery of applications as a managed service, has been held back by some concerns around security and service levels but these have been dealt with, argued Gartner.
Sharon Mertz, research director at Gartner, said that there was more willingness to use third party providers as part of an ecosystem providing applications and support.
"Initial concerns about security, response time and service availability have diminished for many organisations as SaaS business and computing models have matured," she said.
"Usage and vendors' on-demand ecosystems continue to evolve to provide additional business and technology services," she added.
Mertz said the result would be the development of communities of resellers able to offer a greater choice of SaaS options to users.