Businesses have been using SaaS solutions for years, but most have balked at putting that most mission-critical of mission-critical business applications-their ERP system-into the cloud. Now, however, the barriers and fears that have kept many CIOs away from SaaS ERP products appear to be slowly but steadily eroding.

To be sure, on-premise ERP systems still overwhelmingly dominate the market. At present, SaaS solutions account for just two percent of global ERP revenue, according to Forrester Research. Still, Forrester expects worldwide spending on Web-based ERP software to rise about 21 percent annually through 2015, versus low-single-digit growth for ERP products overall. Spurred by numbers like that, established ERP vendors have all introduced on-demand products of their own to counter cloud-only competitors.

The momentum behind SaaS ERP is easy to understand in light of the benefits it offers. Chief among them is the ability to turn software acquisition from a cash-intensive capital expenditure into a more manageable operating expense.

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