Boasting $30 billion in revenues, the on-demand market is growing at about 11% per year - twice the growth rate of the traditional software licensing market. The reaction from traditional software vendors has been either to replicate the business design adopted by upstart software-as-a-service (SaaS) vendors such as Salesforce.com, by offering a stand-alone product, or to ignore the phenomenon in the hope that it remains contained within the customer relationship management (CRM) and human capital management (HCM) sectors. Oliver Wyman's recent work in this software practice suggests that neither of these two approaches may be optimal.
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