The cloud will generate half of the anticipated growth in the European software market this year, according to research by IDC.
The market watcher estimates that on-premise software will rise by just 2% or $1.7bn to $84.9bn but applications sold as a service will jump 48% or $1.7bn to $5.3bn.
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David Bradshaw, IDC research manager for European SaaS and cloud services, said the industry was nearing the point at which the Western European market for traditional software delivery will steadily lose value in the shift to the cloud.
"In certain markets cloud is already taking most if not all of the growth," he told MicroScope. "It is doing well in CRM, talent management and taking chunks of share in email and collaboration."
Areas including ERP were showing some more resistance to provision via the cloud but Bradshaw said cloud vendors would need to offer more reassurances to customers before they could move beyond the early adoption phase.
"There are a lot of aspects of the cloud that are not yet mature but vendors have begun to address governance issues, some are publishing availability statistics and some are giving firmer SLAs with penalties," he said.
Security compliance, SLAs and data location are complex issues that will not be solved in the next year but were "work[s] in progress" that will raise confidence in SaaS among the conservative "late majority" of customers, Bradshaw added.