How the SaaS business model affects software company valuations
December 1, 2014
Grazed from BizJournals. Author: Efrat Kasznik.
Software vendors across the world are embracing the software-as-a-service (SaaS) cloud-based business model in growing numbers. According to Software Equity Group, SaaS software revenues will likely represent about 25 percent of the overall software market in the next five years. Research firm Gartner estimated that global spending on SaaS will reach $22.1 billion by 2015.
Some software vendors are converting their software delivery and revenue models to SaaS, while others acquire SaaS companies to gain access to this market. SaaS mergers and acquisitions transactions grew 25 percent last year, and the median SaaS exit multiple was more than double that paid for traditional, on-premise software targets, according to the Software Equity Group…
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