But security is still a major concern for IT directors, says research

The global credit crunch could prove to be a boost to the software as a service (SaaS) sector, as businesses opt to spread software spending over a longer period, according to research.

A survey for vendor BIW Technologies suggests the SaaS – where software is hosted on the internet rather than bought as a package - could double its annual revenue in the UK to £2.5bn over the next three years.

More than 65 per cent of the 300 IT directors surveyed thought the current economic climate – already boosting the performance of some IT services companies – would lead to greater SaaS uptake.

Research from analyst Forrester Research shows uptake of SaaS tripled in large companies last year.

Almost 70 per cent of those surveyed thought the proportion of their overall software needs that would be provided by SaaS would at least double over the next five years, from around 15 per cent currently to more than 30 per cent.

But there were concerns over security: 70 per cent of survey respondents thought that SaaS was potentially more of a security risk than traditional software because it is hosted online and could be subject to hacking.