While there are signs that the SaaS market is moving, we ain't seen nothing yet. According to a new report from IDC, the worldwide SaaS market is set to reach an eyebrow-raising $40.5 billion by 2014 – that's a compound annual growth rate of around 25 percent.

And on-premises software could soon be as much as a relic as floppy-disks. IDC estimates that by 2014, 85 percent of new software companies will be offering their product through an SaaS delivery mechanism. At the same time, there will be a corresponding decline in traditional software licences, with a predicted

The study, Worldwide Software as a Service 2010–2014 Forecast: Software Will Never Be the Same, also predicts a move away from US dominance of the software market as more application development is carried on in the cloud. Perhaps the hopeful young software professionals surveyed by CWjobs last week had reason for their optimism after all.

According to IDC, this new work of working will compel software vendors to rethink their ways to market. "Figuring out how to find and capitalize on the enormous cloud services transition is the number 1 strategic goal of most IT product vendors," according to Robert Mahowald, research vice president of IDC's SaaS and Cloud Services practice. "Cloud represents both a tremendous challenge and potentially an opportunity to align with partners, create new capabilities, move into new markets, and define new leaders."