25 November 2011 – Legacy software companies get no respect — or market valuation — compared to Software-as-a-Service (SaaS) players. New research shows that over the past year, SaaS company valuations grew twice as much as valuations of legacy software companies rooted in the client-server world. And that SaaS valuation trend will continue for the next 12 to 24 months, according to new research from Martin Wolf M&A Advisors.
For an old-line company it makes sense to freshen up with a SaaS purchase, even paying top dollar in anticipation that the target’s value will rise as more companies get comfortable offloading tasks from on-premises to a service model. At the same time, existing SaaS players want to broaden their services portfolio with more vertical SaaS options, said Martin Wolf, president and founder of the company.