“Both influences have impacted strategic planning processes and have resulted in stronger price-based competition and smaller contracts. Cloud and subscription-based pricing is shifting revenue streams and influencing growth,” Chad Eschinger, Gartner research vice president, said.

“The impact of cloud on traditional on-premises license sales outside of the procurement market, which is heavily influenced by software as a service, is minimal today. Hence, while growth rates are high, the starting point is much lower and many of the deals are for specific functionality, rather than full suite deployments,” he said.

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