Demand from new areas of the software market is driving adoption of software as a service (SaaS), which is predicted to grow 21% in 2007, according to figures released by analyst house Gartner.

This upswing is due, in part, to the SaaS model gaining visibility across all software markets, but especially within emerging areas such as compliance, risk management, office administration, procurement optimisation and sales and service automation.

Across the software markets, the rate of adoption and the prevalence of SaaS varies dramatically. In the enterprise content management (ECM) and search arena, SaaS accounts for as little as 1-2% of total software revenue whereas in the e-learning and web conferencing sectors, SaaS adoption accounts for more than 60% and 70% respectively.

Looking ahead, adoption shows no sign of slowing: analysts at Gartner predict that SaaS revenues will hit $11.5 billion by the end of 2011.